Court holds that an Alabama immigration law violates the Fair Housing Act

Posted on January 12th, 2012 by Joseph William Singer.
Categories: Antidiscrimination law, Fair Housing Act.

A recent Alabama immigration statute was held preempted by the Fair Housing Act because it required many mobile home owners to pay for a government-issued decal while prohibiting undocumented residents from making payments to government officials. In Central Alabama Fair Housing Center v. Magee, 2011 U.S. Dist. LEXIS 142788 (D. Ala. 2011), the federal District Court judge found a violation of the federal fair housing law because there was sufficient evidence of discriminatory intent by legislators against Latino residents (including legal residents) and because the law had a disparate impact on the Latino population without any legitimate government justification. Because the law made it illegal to drive or possess a mobile home without a decal and registration and because it was illegal for undocumented residents to obtain the decal, the law effectively made such persons homeless. The court found the law preempted by federal immigration laws but also found a fair housing violation because the judge interpreted the FHA to protects any person without regard to immigration status. Because a greater percentage of Latinos would be affected by the statute than others, a disparate impact was present and because the Constitution gives the federal government (and not the states) the power to regulate immigration, the state could not demonstrate a legitimate government interest that could justify the disparate impact.

 

 

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Michigan Supreme Court holds that MERS has standing to foreclose

Posted on January 2nd, 2012 by Joseph William Singer.
Categories: Mortgages, Real estate transactions.

Contrary to the ruling of some other courts, the Michigan Supreme Court held that MERS (Mortgage Electronic Registration Systems) has standing to foreclose on properties for which it is the record holder of the mortgage even if it does not “own’ the note or the right to moneys under the note. The court held that because MERS is the “holder of the mortgage, MERS owned a security lien on the properties, the continued existence of which was contingent upon the satisfaction of the indebtedness.” The court concluded that the legislature would want the record mortgage holder to have the right to foreclose on the property. The case is Residential Funding Co. v. Saurman, 805 N.W.2d 183 (Mich. 2011).

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Oral agreement to buy property does not create a compensable property interest when the property is condemned

Posted on November 21st, 2011 by Joseph William Singer.
Categories: Real estate transactions, Statute of frauds, Takings.

The Nebraska Supreme Court ruled that a potential buyer who had an oral contract to buy real estate did not have a right to just compensation when the property was condemned by public authorities. American Central City, Inc. v. Joint Antelope Valley Auth., 2011 WL 2420787 (Neb. 2011). Although oral agreements to buy property are enforceable despite the statute of frauds in cases of part performance, the Nebraska Supreme Court ruled that the potential buyer’s sole remedy was against the seller of the property rather than the public authorities that took the property by eminent domain.

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Job creation held not a sufficiently compelling government interest to justify refusing to rezone industrial property for church use

Posted on November 16th, 2011 by Joseph William Singer.
Categories: Antidiscrimination law, Religious freedom, Zoning.

The Religious Land Use-Institutionalized Persons Act, 42 U.S.C. §2000cc, prohibits enforcing local zoning laws against religious institutions if those laws impose a “substantial burden” on the free exercise of religion and not justified by a compelling government interest that cannot be achieved in a less burdensome manner. The Ninth Circuit applied this statute to deny a city the power to exclude a church from moving to a larger building located in an area zoned for industrial use in the case of International Church of the Foursquare Gospel v. City of San Leandro, 2011 WL 1518980 (9th Cir. 2011). Read article. The church had become bigger over time and was looking for a new facility and hoped to move into an abandoned industrial building. The city hoped to attract a business to the site that would employ city residents and argued that its interest in promoting jobs was a compelling government interest justifying refusal to rezone the property for church uses even if this refusal imposed a substantial burden on religious freedom. The Ninth Circuit held both that job creation was not a compelling government interest that justified such a burden on religious freedom and that even if it was, there were less burdensome ways to achieve that result.

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Court enforces acceleration clause in a commercial lease without regard to whether landlord mitigated damages

Posted on November 12th, 2011 by Joseph William Singer.
Categories: Leaseholds, Real estate transactions.

Many courts uphold acceleration clauses in commercial leases that require tenants to pay the rest of the rent due for the remainder of the lease term if the tenant breaches the lease. Such clauses are usually not enforced in the context of residential leases because they disclaim the duty to mitigate damages. The only issue for acceleration clauses in commercial leases is whether the amount exceeds a reasonable estimate of the likely damages from breach and thus constitute an invalid “penalty” rather than a valid liquidated damages clause. See, e.g., Cummings Properties, LLC v. National Communications Corp., 869 N.E.2d 617 (Mass. 2007). Many courts make this determination by assuming that the landlord still has a duty to mitigate damages by attempting to relet the premises and thus the remaining rent will be invalid if it far exceeds the damages that would be sustained if the landlord found a replacement tenant. See HealthSouth Rehabilitation Corp. v. Falcon Management Co., 799 So. 2d 177 (Ala. 2001). However, some courts hold that the duty to mitigate damages is irrelevant in this context. NPS, LLC v. Minihane, 886 N.E.2d 670 Mass. 2008). The Massachusetts Appeals Court recently explained that this means that it does not matter when the breach occurs during the course of the lease, i.e., at the beginning when many months or years of rent are left and the landlord might be able to obtain a replacement tenant and mitigate damages, or at the end of the lease when replacement of the tenant might be impossible within the remaining time. The only thing that matters is whether the figure chosen by the parties in the acceleration clause (the remaining rent for the lease term) is a reasonable estimate of the damages that might be sustained upon the tenant’s breach. Although this is a difficult determination to make, the court explained that acceleration clauses in commercial leases are presumptively enforceable and should be disregarded only if they are clearly unreasonable. Panagakos v. Collins, 80 Mass. App. Ct. 697, 2011 WL 5067707 (Mass. App. Ct. 2011).

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Massachusetts high court voids title when a buyer purchases property from an owner who obtained title through an improper foreclosure

Posted on October 19th, 2011 by Joseph William Singer.
Categories: Consumer protection, Mortgages, Real estate transactions, Statute of frauds.

In an important but almost inevitable case, Bevilacqua v. Rodriguez,  2011 WL 4908845 (Mass. 2011), the Supreme Judicial Court of the Commonwealth of Massachusetts held that a lender who does not follow proper procedures to foreclose on property cannot pass good title to a subsequent purchaser. The court’s earlier ruling in U.S. Bank Nat’l Ass’n v. Ibanez, 941 N.E.2d 40 (Mass. 2011) had held that a nonjudicial foreclosure cannot lawfully happen unless the party conducting the foreclosure can show requisite assignments of the mortgage given it the right to foreclose. In Bevilacqua, the original buyer Rodriguez granted a mortgage to MERS (Mortgage Electronic Registration Systems, Inc.) as nominee for the real lender Finance America, LLC. At the time of the private foreclosure proceedings, MERS had not formally assigned the mortgage from the original lender to U.S. Bank National Association (US Bank); for that reason, the foreclosure brought by US Bank was invalid. The buyer at the foreclosure sale (also US Bank as trustee for a securitized pool of mortgages) could not therefore transfer good title to the property. Thus the buyer Bevilacqua had no title to the property and no standing to bring a quiet title action against the original owner/borrower. The court did suggest that the buyer could sue the bank from whom he tried to obtain title in order to get relief either in the form of damages or actions would satisfy the statute of frauds and actually result in a clear transfer of title from the original owner to the subsequent buyer.

 

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Third Circuit finds prima facie evidence of disparate impact from municipal redevelopment plan

Posted on September 28th, 2011 by Joseph William Singer.
Categories: Antidiscrimination law, Fair Housing Act.

The Third Circuit has ruled in Mount Holly Gardens Citizens in Action Inc. v. Mount Holly, N.J., 2011 U.S. App. LEXIS 18840 (3d Cir. 2011) that plaintiffs presented sufficient statistical evidence to constitute a prima facie case that displacement of low-income residents from an area slated for redevelopment would have a disparate impact on African American and Latino residents. The court clarified that no evidence of intent to discriminate was needed to bring a disparate impact claim, clarifying ambiguities on this score created by the Third Circuit’s earlier decision, Resident Advisory Bd. v. Rizzo, 564 F.2d 126 (3d Cir. 1977). The court accepted the town’s justification that its redevelopment plan was geared to remove blight but held that the town had a duty to show that no less discriminatory alternative could achieve that goal.

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Register of Deeds in Essex County, Massachusetts refuses to record robo-signed documents

Posted on September 28th, 2011 by Joseph William Singer.
Categories: Mortgages, Real estate transactions, Statute of frauds, Title issues.

A dispute has arisen between South Essex Register of Deeds John O’Brien and the Massachusetts Real Estate Bar Association (REBA) over O’Brien’s refusal to allow seemingly “robo-signed” mortgage documents to be recorded in the Registry of Deeds. REBA contends that state law allows the recording of any document “purporting” to be signed by an authorized signatory to a mortgage or a mortgage assignment. Mass. Gen. Laws ch. 183, § 54B. But Register O’Brien points to 1,300 documents received that were signed “Linda Green” but which exhibit different handwriting styles and different titles, and some were filed after 2010 when it was believed that Green stopped working for a mortgage company. O’Brien takes the position that he will not record documents signed by “known robo-signers” and he will also forward suspicious documents to the Attorney General’s office for investigation of mortgage fraud. Scott Pitman & MIchael Pill, To record or not to record robo-signed documents? 40 Mass. Lawyers Weekly 9 (Sept. 26, 2011).

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More states prohibit transfer fee covenants

Posted on September 14th, 2011 by Joseph William Singer.
Categories: Consumer protection, Real estate transactions, Restraints on alienation, Servitudes, Title issues.

Idaho, Indiana, Mississippi and Montana have all passed statutes prohibiting enforcement of any transfer fee covenants entered into after the dates the legislation goes into effect. See 2011 Idaho Sess. Laws 107; 2011 Ind. Acts 136; 2010 Miss. Gen. Laws 348; 2011 Mont. Laws 259. Transfer fee covenants are promises inserted in deeds to pay a fee to the original seller of the property any time it is sold in the future. Such fees were abolished in New York State in 1852 in the case of DePeyster v. Michael, 6 N.Y. 467 (1852) as a vestige of feudalism.

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Bank cannot suggest a homeowner stop mortgage payments as part of modification negotiations and then foreclose on the basis of that failure to pay

Posted on September 10th, 2011 by Joseph William Singer.
Categories: Mortgages, Real estate transactions, Statute of frauds.

A federal District Court judge in Massachusetts has ruled in the case of Dixon v. Wells Fargo Bank, 2011 WL 2945795 (D. Mass. 2011), that a ban cannot induce a homeowner to stop making mortgage payments as a prerequisite to negotiations to modify the mortgage and then use that failure to make the mortgage payments as a predicate for foreclosing on the property and evicting the owner. The bank’s representation that it would renegotiate following the borrower’s cessation of mortgage payments constituted a promise on which the borrower reasonably relied and that promise could be equitably enforced by denying the bank the right to foreclose in the circumstances. The court did not find a promise by the bank to modify the mortgage but it did have a duty to negotiate the modification in good faith before foreclosing.

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Massachusetts Attorney General settles lawsuit with subprime mortgage lender, requiring $115 million of loan modifications

Posted on August 10th, 2011 by Joseph William Singer.
Categories: Antidiscrimination law, Consumer protection, Fair Housing Act, Mortgages, Real estate transactions.

Attorney General Martha Coakley announced that the Commonwealth of Massachusetts settled a lawsuit with a subprime mortgage lender that originated subprime mortgages it knew were likely to fail and which not only targeted African American and Latino borrowers but gave its employees discretion to charge higher fees to such borrowers. The company will pay a penalty of almost $10 million to the Commonwealth and will direct its mortgage servicer to modify $115 million in loans either by writing down the principal balance of lowering interest rates. read article The settlement is based on the legal ruling in the earlier case of Commonwealth v. Fremont Inv. & Loan, 897 N.E.2d 548 (Mass. 2008), which held that it might violate the state consumer protection act to market mortgages that were almost certain to end in foreclosure.

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Massachusetts high court denies eviction from a home foreclosed in a private sale unless there is proof of a right to foreclose

Posted on August 9th, 2011 by Joseph William Singer.
Categories: Mortgages, Real estate transactions, Statute of frauds, Title issues.

In an extension of its earlier ruling in U.S. Bank Nat’l Ass’n v. Ibanez, 941 N.E.2d 40 (Mass. 2011) that a foreclosure is invalid unless the party seeking foreclosure proves that it owns the mortgage (has the right to foreclose) at the time of the foreclosure, the Supreme Judicial Court of the Commonwealth of Massachusetts ruled in the case of Bank of New York v. KV Bailey, 2011 WL 3307553 (Mass. 2011),  that a homeowner could challenge an eviction from his home even though it was foreclosed in a private sale to determine whether the mortgagor/lender had the power to foreclose. Because Massachusetts uses private foreclosure rather than court-supervised foreclosure, the ruling extends court supervision of foreclosure to homeowners by effectively requiring foreclosing parties to have proof of the right to foreclose before the foreclosure sale. It does so by denying power to evict an occupying homeowner without proof of the right to possession of the premises. Because the law generally protects a peaceable possessor of land unless the one seeking possession can show a better title denial of the right to evict has the effect of regulating the prior foreclosure process, which, in turn, will require that the market for transfers of mortgages comply with the requisite formalities of the statute of frauds.

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Connecticut Supreme Court refuses to enforce unconscionable post-nuptial agreement

Posted on August 5th, 2011 by Joseph William Singer.
Categories: Marital property.

The Connecticut Supreme Court ruled in Bedrick v. Bedrick, 17 A.3d 17 (Conn. 2011) that post-nuptial agreements may be enforceable but that they are subject to stricter standards than premartial agreements. Moreover, in this case, the court found the contract unconscionable at the time of trial and thus void and unenforceable. Such agreements must be examined to ensure that they are fair and equitable at the time of divorce and whether enforcement would “work an injustice.”

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Second Circuit upholds “hot news” doctrine

Posted on July 2nd, 2011 by Joseph William Singer.
Categories: Copyright, Intellectual property.

A recent case replays the conflict in the famous case of INS v. AP (International News Service v. Associated Press), 248 U.S. 215 (1918), which held that a news organization could stop a rival from selling news it had gathered for a short period when the news was still hot. In effect, the doctrine created a property right against a competitor’s use of the information for commercial purposes during the initial sales period. The Second Circuit reaffirmed that doctrine in the case of Barclays Capital Inc. v. Theflyonthewall.com, 2011 WL 2437554 (2d Cir. 2011), while simultaneously clarifying that noncompetitors were perfectly free to transmit the information without limit once it had been made public. The court held that investment banks could not stop a financial Web site from publishing on the Internet the research conclusions of the banks’s analysts once they were released to the public. At the same time, the banks could stop competitors from copying and reselling the information at least for a while. In effect, the hot news doctrine creates a property right against competitors but not against noncompetitors. Although noncompetitors can report the conclusions and reasoning of hte analysts, copyright law prohibits them from simply reprinting the actual language of the reports. The decision reversed the lower court’s ruling which had required defendant website to wait until 10 am to publish news about the financial reports that had been made public before 9:30 am, Read article.

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New York authorizes same-sex marriages

Posted on June 25th, 2011 by Joseph William Singer.
Categories: Antidiscrimination law, Marital property, Sexual orientation.

After long negotiations and 4 votes by Republican Senators, New York passed a same-sex marriage bill on June 24, 2011, signed by the Governor the same day. New York will be the seventh jurisdiction to allow such marriages. The others are Connecticut, District of Columbia, Iowa, Massachusetts, New Hampshire, Vermont. read article

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NY court holds that MERS cannot bring foreclosure actions

Posted on June 24th, 2011 by Joseph William Singer.
Categories: Mortgages, Real estate transactions, Statute of frauds.

An appellate court in New York has held that MERS (Mortgage Electronic Registration Systems) cannot file foreclosure lawsuits in its own name because it does not “own” the mortgage, having neither the right to payment under the note nor the right to foreclose. Bank of N.Y. v. Silverberg, 2011 WL 2279723 (N.Y. App. Div. 2011). Despite the fact that the parties put MERS’s name on the mortgage, it is not the real party in interest, having no right to payment under the note

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NY and Delaware AGs investigate mortgage bundling for requisite written documentation of the chain of title

Posted on June 24th, 2011 by Joseph William Singer.
Categories: Mortgages, Statute of frauds.

The New York and Delaware Attorneys General have asked for information from two trustees of mortgage bundles (Bank of New York Mellon and Deutsche Bank) to determine whether they complied with all contractual obligations in the process of bundling the mortgages and selling shares to investors. The trusts that bundled the mortgages were supposed to ensure that proper paperwork was completed in transferring “ownership” of  the mortgages to the trust to ensure that the investors were actually investing in something that the trust owned. Many of the bundling contracts required the trust to examine the individual mortgages to ensure a proper chain of title and failure to do so would constitute a breach of contract that could lead to the whole thing unraveling. Read article

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Eighth Circuit upholds finding that landlord sexually harassed a tenant in violation of the Fair Housing Act but affirms the trial court’s reduction of the jury’s punitive damages award

Posted on June 3rd, 2011 by Joseph William Singer.
Categories: Antidiscrimination law, Due process, Fair Housing Act, Leaseholds.

In Quigley v. Winter, 598 F.3d 938 (8th Cir. 2010),the Eighth Circuit upheld a trial court ruling that landlord sexually harassed tenant in violation of the Fair Housing Act (FHA), but it affirmed the  trial court’s reduction of the jury’s punitive damages award. The jury awarded $13,685 in compensatory damages and $250,000 in punitive damages. The trial court reduced the punitive damages award to $20,527.50.

The landlord engaged in a variety of inappropriate behavior, rubbing tenant’s arm, standing close to her and rubbing his genital area, following tenant and her sister into the bedroom while conducting an inspection and they were in their pajamas and then refusing to leave until asked to do so three times, calling tenant while drunk at 2:30 or 3:00 am.  The Eighth Circuit held that a claim for hostile housing environment created by sexual harassment is actionable under the FHA, that there was sufficient evidence to find that landlord’s conduct in tenant’s home rose to that level, and that landlord had engaged in quid pro quo harassment by suggesting tenant undress for him to get her security deposit back. The court also found a violation of 42 U.S.C. §3617 when landlord engaged in coercion, intimidation, and interference with tenant’s enjoyment of her housing rights.

However, the court approved the trial judge’s reduction of the punitive damages award from $250,000 to $$20,527.50 on the basis of Supreme Court precedents holding it violates due process to award punitive damages claims that are out of proportion to actual damages. See, e.g., State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003);  BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (1996). While the court found landlord’s conduct “reprehensible,” it did not find the degree of reprehensibility to justify a punitive damages award eighteen times the compensatory damages. The Eighth Circuit agreed with the trial judge that an award one and a half times the compensatory damages sufficiently reflected the reprehensibility of landlord’s conduct.

 

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Washington Supreme Court adopts relative hardship doctrine and refuses to order a house removed when it was unwittingly built on land owned by another

Posted on June 2nd, 2011 by Joseph William Singer.
Categories: Easements, Servitudes, Statute of frauds, Trespass.

Defendants unknowingly built their house on land that belonged to the plaintiff who also did not know that the land belonged to him. The mistake was discovered after the house was built and plaintiff sued to eject the trespassers from his land. The Washington Supreme Court denied injunctive relief, adopting the relative hardship doctrine. The court granted plaintiff damages for the value of the land encroached on by his neighbor’s structure but denied plaintiff an injunction ordering the structure removed. Proctor v. Huntington, 238 P.3d 1117 (Wash. 2010).

 

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Maine Supreme Court denies foreclosure when the lender filed fraudulent affidavits

Posted on June 2nd, 2011 by Joseph William Singer.
Categories: Mortgages, Real estate transactions, Statute of frauds.

On May 19, 2011, the Maine Supreme Court denied summary judgment on a foreclosure claim when it found that affidavits filed by the lender were suspect and possibly fraudulent. HSBC Mortgage Services, Inc. v. Murphy, 2011 Me. LEXIS 59, 2011 ME 59 (Me. 2011). The question was whether the note had been validly assigned from the original lender to the entity now seeking to foreclose. The court found the affidavits testifying to that effect to be inherently untrustworthy because (1) one affidavit swearing that a mortgage assignment had been recorded was signed before the assignment was recorded, (2) another affidavit and assignment suggested the same person was simultaneously the vice president of both the assignor and the assignee, (3) an affidavit’s jurat was dated four days before the affidavit was signed, and (4) an affidavit in support of a summary judgment motion that was denied provided information vital to the entry of a judgment that was unavailable until over four months after the affidavit was signed. The court remanded for further proceedings.

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Another state abolishes transfer fee obligations

Posted on May 12th, 2011 by Joseph William Singer.
Categories: Estates & future interests, Real estate transactions.

The New Jersey legislature joined an increasing number of states that have passed statutes prohibiting enforcement of transfer fee obligations. 2010 N.J. Laws 102, codified at  N.J. Stat. 46:3-28 to -33. read article The act applies prospectively only. Transfer fee obligations are duties to pay moneys to a prior seller of the land every time it is sold. Such fees restrain alienation of land and were held to constitute illegal vestiges of feudalism in the mid-nineteenth century. See DePeyster v. Michael, 6 N.Y. 467 (1852).

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Oral promise to convey land enforceable when promisee builds a home in reliance on the promise

Posted on May 12th, 2011 by Joseph William Singer.
Categories: Real estate transactions, Statute of frauds.

In a straight-forward application of the usual rule, the Maine Supreme Judicial Court recognized an exception to the statute of frauds by enforcing an oral promise to convey land when the promisee relied on the promise and built a house on the land. In this case, the promise was made by parents to their son and daughter. The daughter built a home on the land with the parents’ assistance and then asked for a deed to the land. When the parents refused, she sued them seeking a court order to them to transfer title to the land to her and the court granted her request. Harvey v. Dow, 11 A.3d 303 (Me. 2011).

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No presumption of hostility when a family member claims a prescriptive easement

Posted on May 12th, 2011 by Joseph William Singer.
Categories: Adverse possession.

The Supreme Judicial Court of Maine has created an exception to the presumption that prescriptive use of another’s property is non-permissive when the servient estate is owned by a family member. Androkites v. White, 10 A.3d 677 (Me. 2010). The court held that, in such cases, it is more likely that the use is permissive and thus the usual presumption is overcome. A few states presume use to be permissive in all cases while most states retain the same presumption of nonpermissiveness for both adverse possession claims and prescriptive easement claims.

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Delaware recognizes civil unions

Posted on May 12th, 2011 by Joseph William Singer.
Categories: Marital property, Sexual orientation.

Governor Jack Markell has signed a bill adding Delaware to the list of states that authorize the creation of civil unions for same-sex couples that have the same rights as married couples under state law. read article The list of states that recognizes civil unions now includes California, Delaware, Hawai`i, Illinois, Nevada,New Jersey, Oregon, and Washington. States that recognize domestic partnership arrangements that have more limited rights include Colorado, Maine, Maryland, and Wisconsin. read article

Jurisdictions that authorize same-sex marriage are Connecticut, District of Columbia, Iowa, Massachusetts, New Hampshire, Vermont. In California, 18,000 couples were married before the constitutional amendment was approved abolishing same-sex marriage. New York and Maryland recognize marriages celebrated in states that recognize them. Rhode Island recognizes out-of-state same-sex marriages for some purposes, while California, Illinois, New Jersey, and New Mexico recognizes such marriages as civil unions. read article

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Texas courts allow fraud claims in real estate transactions despite a non-reliance clause

Posted on May 4th, 2011 by Joseph William Singer.
Categories: Leaseholds, Real estate transactions, Statute of frauds.

The states disagree about whether parties to real estate transactions can sue each other for fraud when the contract of sale contains a “non-reliance clause” stating that neither party is relying on any representations made by the other party that are not included in the written contract. Some states allow such claims on the ground that “fraud vitiates consent” and such clauses do not amount to agreements to be defrauded. But other states hold that such clauses immunize the contracting parties from claims of fraud based on oral statements made prior to the deal. The Texas Supreme Court has waffled on this issue, first holding that contracts can be avoided on the ground of fraudulent inducement, Williams v. Glash, 789 S.W.2d 261, 264 (Tex. 1990), and then ruling that the sophisticated parties are free to bargain around this rule by non-reliance clauses, Schlumberger Technology Corp. v. Swanson, 959 S.W.2d 171 (Tex. 1997). See also Forest Oil Corp. v. McAllen, 268 S.W.3d 51 (Tex. 2008). However, the court clarified in Italian Cowboy Partners, Ltd. v. Prudential Ins. Co., 2011 Tex. LEXIS 291 (Tex. 2010), that  a non-reliance clause in a real estate contract will not immunize a real estate seller from liability for fraud if it contains a “standard merger clause” which recites that no representations were made other than those in the contract. Only if the clause states that the buyer is not relying on oral statements made by the seller would the buyer be foreclosed from suing for damages for fraud or to rescind the agreement because of fraud. Another way to waive the right to sue for fraud is to do so directly by a clear statement waiving the right to sue for fraudulent inducement.

In this case, the court allowed tenants to rescind a restaurant lease and recover damages when the landlord lied about the condition of the premises which were afflicted with persistent sewer gas odor.

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