Stray bullets from gun club ruled a nuisance

Posted on June 8th, 2012 by Joseph William Singer.
Categories: Nuisance, Zoning.

A Massachusetts trial court has banned a gun club from allowing pistols and rifles to be fired on its premises in the face of evidence that stray bullets have entered neighboring properties. Read article Justice Charles Hely converted a three-year-old temporary restraining order into a permanent injunction and ordered payment of a total $22,000 in damages to be paid to several neighbors who lived within a half-mile radius of the club. One plaintiff narrowly escaped being hit by a bullet that entered her laundry room shortly after she left it. The club had also been shut down for failure to obtain necessary permits.

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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 wrestles with what it means to “continue” a prior nonconforming use

Posted on May 19th, 2012 by Joseph William Singer.
Categories: Zoning.

A Mississippi appeals court ruled that an owner of an RV park on could allow portable cabins to be placed on the property as well as RVs. Jones v. Lutken, 62 So. 3d 455 (Miss. Ct. App. 2011). Many courts would find any change like this that expands the use of the property in any appreciable way to exceed the prior nonconforming use limitation but some courts, like this one, are more forgiving.

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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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Covenants no longer strictly construed to reduce encumbrances on land but are now interpreted to achieve the intent of the parties

Posted on May 19th, 2012 by Joseph William Singer.
Categories: Consumer protection, Real estate transactions, Servitudes.

A New Mexico Appeals Court joined the modern trend in rejecting the interpretive rule that covenants should be narrowly construed, instead adopting the modern approach of interpreting the grant to achieve the grantor’s intent. Agua Fria Save The Open Space Ass’n v. Rowe, 255 P.3d 390 (N.M. 2011). When the language of the grant is unclear, “evidence of the circumstances surrounding the making of the contract and of any relevant usage of trade, course of dealing, and course of performance” is relevant in interpreting the government documents. 255 P.2d at 395.

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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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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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Bank cannot foreclose if it fails to mediate in good faith as required by state law

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

In Pasillas v. HSBC Bank USA, 255 P.3d 1281 (Nev. 2011), the Nevada Supreme Court held that a bank cannot foreclose if it fails to act in good faith to participate in state-mandated mediation with the borrower.

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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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Supreme Court reaffirms availability of patents for business methods

Posted on May 9th, 2012 by Joseph William Singer.
Categories: Intellectual property.

In Bilski v. Kappos, 130 S.Ct. 3218 (2010), the Supreme Court reaffirmed that the federal patent law allows patenting of some business processes.

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New Jersey Supreme Court allows foreclosure despite faulty procedures

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

In US Bank Nat’l Ass’n v. Guillaume, 38 A.3d 570 (N.J. 2012), the Supreme Court of New Jersey applied the equitable doctrine of substantial compliance to allow a bank to foreclose despite its failure to include the name and address of the actual lender on the notice of intent to foreclose as required by state law. The notice actually only included the name of the mortgage service, not the mortgage lender. Dismissal without prejudice is not the exclusive remedy for the service of a notice of intention to foreclose that does not satisfy Fair Foreclosure Act’s requirement that a notice of intention include the name and address of the actual lender. Instead, the trial court may dismiss the action without prejudice, order the service of a corrected notice, or impose another remedy appropriate to the circumstances of the case; overruling Bank of N.Y. v. Laks, 27 A.3d 1222 (N.J. Super. Ct. App. Div. 2011).

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$2 million settlement agreement by landlord & building superintendent for systematic sexual harassment of tenants

Posted on May 9th, 2012 by Joseph William Singer.
Categories: Antidiscrimination law, Fair Housing Act, Leaseholds, Trespass.

On May 8, 2012, the U.S. Attorney’s office in Manhattan announced a $2 million settlement by a landlord, his building superintendent and the superintendent’s son to pay fines to tenants who were sexually harassed by the superintendent. The building superintendent was a convicted sex offender who served 14 years in prison for molesting or raping 3 girls and a woman before being hired by the landlord to run three buildings. The superintendent would enter women’s apartments while drunk and demand sex, retaliating when he did not get his way. Both the landlord and the superintendent are also barred by the agreement from owning or managing occupied properties. read article

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Washington state requires mediation before foreclosure

Posted on February 26th, 2012 by Joseph William Singer.
Categories: Mortgages, Real estate transactions.

Washington state passed the Foreclosure Fairness Act, 2011 Wash. Legis. Serv. 58, requiring telephone notification and a 60-da6 opportunity to meet with the lender before foreclosure proceedings can begin. read article

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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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Vermont prevents creditor from attaching tenancy by the entirety property

Posted on February 26th, 2012 by Joseph William Singer.
Categories: Marital property.

The Vermont Supreme Court held, in RBS Citizens v. Ouhrabka, 30 A.3d 1266 2011 VT 86 (Vt. 2011), that creditors cannot attach tenancy by the entirety property unless both spouses agreed to the debt. This appears to be the majority rule in the country although some states disagree.

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Groundwater ownership in Texas

Posted on February 26th, 2012 by Joseph William Singer.
Categories: Environmental law, Takings, Water rights.

The Texas Supreme Court has issued a somewhat confusing opinion holding that landowners own the groundwater beneath the surface of their land. In Edwards Aquifer Auth. v. Day, No. 08-0964 (Feb.24, 2012), the Texas Supreme Court held that a water regulation commission may have taken an owner’s groundwater rights without just compensation under the Penn Central test when it limited an owner’s groundwater rights to the amounts of water he had historically taken from the land. The court found a state law that defined the amount of groundwater one can withdraw based on historical uses to be a potential taking of property because it believed an owner should not lose the right to withdraw vested rights in groundwater just because the landowner had failed to exercise his right to withdraw it in the past. The court did not overturn the state’s free use or absolute ownership rule for groundwater that allows owners to withdraw water without liability to neighboring owners whose wells are dried up or whose water amounts are reduced. It did hold that the landowner “owns” the groundwater beneath the surface and that use of several factors, including but not limited to historical uses, might constitute a legitimate regulatory measure. The court remanded for a determination of whether the state statutes, as applied to this owner, constituted a taking of property under the multi-factor Penn Central test. The case leaves groundwater regulation in Texas in a state of great uncertainty since the allowable parameters of regulation of groundwater are now in doubt. The Court cautioned that it did not believe its ruling would be disruptive and the legislature remained empowered to enforce environmental laws regulating water withdrawal without violating the takings clause. At the same time, it suggested that environmental regulation of water might require compensation of owners whose rights to withdraw water are restricted.

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Banks as landlords

Posted on February 26th, 2012 by Joseph William Singer.
Categories: Consumer protection, Leaseholds, Mortgages, Real estate transactions.

Banks that have obtained title to foreclosed properties traditionally would sell them quickly but the current real estate malaise resulting from the subprime crisis has made it difficult for them to do so. The result is that many properties remain on the books of the banks. Under state property law, the banks have the obligations all landowners have to comply with housing codes and the warranty of habitability. But many banks do not have established procedures for keeping track of all the individual properties they own, especially when the mortgages to those properties were securitized, making the owner of the trust that owns those mortgages the effective landlord of thousands of homes. Both localities and tenants are having to deal with the failure of banks to comply with regulations mandating maintenance of rental properties. read article.

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Maryland and Washington state pass same-sex marriage bills

Posted on February 26th, 2012 by Joseph William Singer.
Categories: Antidiscrimination law, Marital property, Sexual orientation.

Governor Christine Gregoire of Washington State signed Senate Bill 6239 on Feb. 13, 2012 authorizing same-sex marriage in the state of Washington. Wash. Sess. Laws 2012 ch. 3. The bill is effective as of June 7, 2012. Governor Martin O’Malley will sign a similar bill in Maryland, called the Civil Marriage Protection Act, House Bill 438, on March 1, 2012. Both laws may be subject to repeal by referendum votes by the citizens of the respective states. New Hampshire’s legislature is talking about repealing its same-sex marriage legislation but Governor John Lynch has vowed to veto any such bill. read article

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Ninth Circuit holds that the Fair Housing Act does not regulate roommate choices or advertisements

Posted on February 9th, 2012 by Joseph William Singer.
Categories: Antidiscrimination law, Fair Housing Act.

The Ninth Circuit ruled in Fair Housing Council of San Fernando Valley v. Roommate, LLC, 2012 U.S. App. LEXIS 1971 (9th Cir. 2012), that the Fair Housing does not regulate roommate choices or advertisements expressing preferences with respect to roommates, dismissing a claim against Roommate.com, a website that allowed individuals to place ads stating preferences based on sex, sexual orientation, religion, and familial status in connection with roommate searches. The opinion by Judge Alex Kozinski noted that the Fair Housing Act regulates “dwellings” which are defined to include “any building, structure, or portion thereof which is occupied as, or designed or intended for occupancy as, a residence by one or more families.” 42 U.S.C. §3602(b)(emphasis added by this editor). Despite the “or portion thereof” language, the court noted that the constitution protects rights of intimate association and that it would be unconstitutional to restrict roommate choices so the statute should be read to preclude such regulation if possible. Since the statute could be interpreted to regulate only the transfer of an “independent living unit” rather than shared space, and doing so would avoid constitutional problems, that is how the court interpreted the “portion thereof” language. The court also held that advertisements that express preferences that would otherwise be discriminatory are lawful in the roommate context since §3604(c) prohibits ads that “indicate any [discriminatory] preference…with respect to the sale or rental of a dwelling” and “dwelling” does not include shared living space, there is no prohibition against discriminatory roommate ads. This suggests that it is lawful to place an ad that expresses racial preferences as well as preference with respect to sex, sexual orientation, religion or familial status as long as the space is shared rather than transferred. At the same time, that fact situation was not addressed by the court because Roommate.com does not seek such information.

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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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