Homeowners’ Association dues lost because the property was taken by eminent domain are held not to be compensable under the takings clause

Posted on February 7th, 2013 by Joseph William Singer.
Categories: Estates & future interests, Servitudes, Takings.

When a government took 14 units from a homeowners association by eminent domain, the remaining owners lost the dues and assessments that those owners would have contributed to the homeowners association. However, the Fifth Circuit has ruled that those lost assessments represent mere “contractual rights” that are not compensable under the takings clause as lost property rights even though they ran with the land. United States v. 0.073 Acres of Land, — F.3d —, 2013 WL 322242 (5th Cir. 2013). The court looked to Louisiana law to determine whether the assessments should be considered to be “property” rights and found that they were. However, it interpreted the case of United States v. General Motors Corp., 323 U.S. 373 (1945) to mean that loss of future profits from land is not compensable. The court acknowledged that it was adopting a minority view and that most courts have held that covenants are property within the meaning of the takings clause.

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Possibility of reverter enforced by Tennessee court with award of damages for lost rental income

Posted on May 19th, 2012 by Joseph William Singer.
Categories: Estates & future interests, Real estate transactions.

An appeals court in Tennessee correctly interprets a conveyance which provided that the lot “shall automatically revert to Seller in fee simple” if the buyer did not comply with stated conditions created a fee simple determinable with a possibility of reverter. Lasater v. Hawkins, 2011 WL 4790971 (Tenn. Ct. App. 2011). The court not only enforced the condition, finding title to have automatically reverted to the seller but granted the seller (and possibility of reverter owner) five years of rent that the present estate owner had collected since the condition was violated.

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Court rules that designated open space on plat is insufficient to establish an easement absent proof the developer induced buyers to purchase in reliance on promises of open space.

Posted on May 19th, 2012 by Joseph William Singer.
Categories: Consumer protection, Easements, Estates & future interests, Real estate transactions, Statute of frauds.

Disagreeing with the ruling of the Massachusetts Supreme Judicial Court in Reagan v. Brissey, 844 N.E.2d 672 (Mass. 2006), an appeals court in New Mexico held that open space designated on a recorded plat is not sufficient to create an easement of access by owners of lots on the map in the absence of evidence the developer made representations to buyers inducing them to buy in reliance on promises those lots would remain open. The mere presence of open space on the map was insufficient to prevent the developer from selling that open space for development purposes. Agua Fria Save The Open Space Ass’n v. Rowe, 255 P.3d 390 (N.M. 2011)

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New York high court exempts options to renew leases from the rule against perpetuities

Posted on May 19th, 2012 by Joseph William Singer.
Categories: Estates & future interests, Restraints on alienation.

The New York Court of Appeals joined the majority of states in holding that the rule against perpetuities does not apply to options to renew leases. Bleecker St. Tenants Corp. v. Bleeker Jones LLC,  945 N.E.2d 484 (N.Y. 2011). It should be noted that only a minority of states have the traditional rule against perpetuities and New York’s rule is codified by statute. “No estate in property shall be valid unless it must vest, if at all, not later than twenty-one years after one or more lives in being at the creation of the estate and any period of gestation involved.” N.Y. Est. Powers & Trusts §9-1.1(b).

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Automatic reverter creates fee simple determinable

Posted on May 9th, 2012 by Joseph William Singer.
Categories: Estates & future interests, Real estate transactions, Restraints on alienation.

In a straightforward application of traditional doctrine, a Tennessee court ruled that a deed condition that stated that a lot “shall automatically revert to Seller in fee simple” if the buyer does not comply with stated conditions (to install a waterline within a year) creates a fee simple determinable that transfers title automatically. Lasater v. Hawkins, 2011 WL 4790971 (Tenn. Ct. App. 2011)

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More states prohibit transfer fee obligations

Posted on February 26th, 2012 by Joseph William Singer.
Categories: Consumer protection, Estates & future interests, Real estate transactions.

Statutes have been passed in Pennsylvania, South Dakota, Virginia and Washington prohibiting transfer fee obligations which requires payments of fees to a prior seller every time the property is sold. 2011 Pa. Laws 8; 2011 S.D. Sess. Laws 196; 2011 Va. Acts 706; 2011 Wash. Legis. Serv. 36.

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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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Increasing regulation of transfer fee covenants

Posted on November 24th, 2010 by Joseph William Singer.
Categories: Estates & future interests, Servitudes.

More and more states are passing statutes prohibiting “transfer fee covenants” which purport to require owners of property to pay a portion of the sales price (or a fixed amount) to the original developer whenever the property is sold. Such provisions were held to be unenforceable restraints on alienation in the 1852 New York Court of Appeals case De Peyster v. Michael, 6 N.Y. 467 (1852), a case that is apparently not well known to those peddling these covenants today. De Peyster involved a “quarter sale” clause that required one-fourth of the sale price to go to the heirs of the van Rensselaer family. The court found the arrangement to be a vestige of feudalism akin to quitrents paid to a lord and held that such property relationships had been outlawed in New York by both statute and common law. Recent statutes prohibiting transfer fee covenants (at least prospectively) were passed in Arizona, Minnesota and Utah. 2010 Ariz. Sess. Laws 40; 2010 Minn. Laws 371; Utah Code § 57-1-46.

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