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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Texas joins states prohibiting real estate transfer fees

Posted on May 9th, 2012 by Joseph William Singer.
Categories: Real estate transactions, Restraints on alienation, Servitudes.

Texas joined the other states that have passed statutes prohibiting real estate private transfer fees. 2011 Tex. Gen. Laws 211.

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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 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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Co-ops accused of racial bias

Posted on February 22nd, 2010 by Joseph William Singer.
Categories: Antidiscrimination law, Co-ops, Fair Housing Act, Restraints on alienation.

Two Bronx communities organized as co-ops require references from three co-op members in order to buy units. After using testers, the Fair Housing Justice Center has filed a lawsuit arguing that this requirement has a discriminatory effect when existing co-op members are overwhelmingly white and when the requirement was not consistently applied. Read article.

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Restraints on alienation

Posted on September 20th, 2009 by Joseph William Singer.
Categories: Restraints on alienation, Servitudes.

A Connecticut trial court held a right of first refusal invalid as an unreasonable restraint on alienation when it could be exercised either by the homeowners association or by any individual homeowner when there was no mechanism to determine who could exercise the right if more than one person sought to buy the property. Gilbert v. Beaver Dam Ass’n of Stratford, 2002 Conn. Super. LEXIS 2765 (Super Ct. 2002).

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