Keeping Current Property

Volume 27 No. 2

Keeping Current—Property Editor: Prof. Shelby D. Green, Pace University School of Law, White Plains, NY 10603, sgreen@law.pace.edu. Contributors: Prof. Matthew J. Festa, Prof. Bridget Fuselier, and Prof. Darryl C. Wilson.

Keeping Current—Property offers a look at selected recent cases, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.

CASES

ARBITRATION: Res judicata does not bar second arbitration over construction defects unknown at time of earlier arbitration. A trust for the benefit of actor Tom Hanks and his wife, actress Rita Wilson, contracted for the construction of a single family residence near Sun Valley, Idaho. When construction was almost complete, a dispute arose and the contractor requested arbitration. The trustee asserted a counterclaim alleging substandard and defective work but failed to introduce any evidence, resulting in a dismissal of the counterclaim. After the construction ended, the owners discovered defects that were causing a water problem in the home. The trustee demanded arbitration, but the trial court ruled that res judicata barred all later claims for construction defects, even if unknown and not reasonably discoverable at the time of the first arbitration. The supreme court reversed, holding that the trustee was not required to assert a counterclaim in the first arbitration regarding alleged latent defects not known at the time. The parties’ agreement did not limit arbitration to one claim or preclude future arbitration for presently unknown issues. Storey Constr., Inc. v. Hanks, 224 P.3d 468 (Idaho 2009).

BANKRUPTCY: Foreclosure sale after date specified in bankruptcy court’s order for lifting automatic stay is valid. A limited partnership purchased the interest of a limited partner in company property for $50,000 in cash and an obligation to pay $700,000 within 120 days, secured by a deed of trust on the property. The partnership failed to pay any of the $700,000 and filed for bankruptcy protection. The bankruptcy court issued an order conditionally lifting the automatic stay to allow a foreclosure sale “on August 1, 2000,” unless the partnership paid $50,000 by June 12 and the remaining $650,000 on or before August 1. The partnership made the first but not the second payment. A Texas statute requires foreclosures to take place between 10 a.m. and 4 p.m. on the first Tuesday of a month. August 1 was a Tuesday, but the limited partner held the foreclosure sale on the first Tuesday in September. Four years later, the partnership sought to invalidate the foreclosure sale because it took place after the August 1 date specified in the bankruptcy court’s order. The supreme court rejected the plea. Although it was true that unambiguous orders will be enforced literally, the partnership’s reading would produce the absurd result that the sale was impossible because of a timing problem. Under the order, the sale could only proceed if payment was not received on or before August 1, which could take place at any time on that day. Hemyari v. Stephens, 355 S.W.3d 623 (Tex. 2011).

DEEDS: Reservation of “25% of all minerals” applies to grantor’s fractional share, not to entire ownership. The Nichols owned all the surface interest and one-half of the mineral interest in 640 acres of land. On their death, their nine children each came to own an undivided 1/9th surface interest and an undivided 1/18th interest in the minerals. Eight of the siblings executed separate warranty deeds to John Q. Nichols, granting “all my undivided one-ninth interest” in the land, but excepting and reserving to the grantors “25% of all minerals.” Later a contest arose between the heirs of John Q. Nichols and those of his siblings as to the ownership of the mineral interests. The heirs of the siblings argued that the deeds should be read as one transaction, with the result that the siblings reserved 25% of the mineral interests and John Q. Nichols received the other 25%. The court rejected this approach, reading each deed as a separate transaction, which meant that because each grantor only owned a 1/18th interest in the minerals, each only reserved 25% of that 1/18th. Thus, the eight grantors collectively reserved a 1/9th (11%) mineral interest, and the remaining 39% passed to John Q. Nichols. Nichols v. Goughnour, 820 N.W.2d 740 (N.D. 2012).

FORECLOSURE: Foreclosure purchaser has right to take possession by peaceable self-help. After a foreclosure of his parents’ home, Nickens remained in possession despite notice that the agent for the foreclosure purchaser intended to enter the premises and remove his belongings. While Nickens was out of town, the agent entered the premises, removed his belongings, changed the locks, and affixed a “no trespassing” sign to the door. Nickens sued for forcible entry and detainer, as well as conversion. The lower courts ruled for the foreclosure purchaser and its agent. The Maryland Court of Appeals agreed with the lower courts on the forcible entry and detainer claim, but reversed on conversion. It found that a landowner’s right to re-enter a premises unlawfully detained had long existed at common law, so long as that re-entry was peaceable, which was the case here. The legislative procedure for obtaining a sheriff’s writ of possession was only an alternative available to a landowner, which did not abrogate the common law right of self-help. Public policy supported the reasonable use of self-help in foreclosure repossession. The court remanded the conversion claim, ruling that Nickens’s continuation in unlawful occupancy after the foreclosure did not establish an intent to abandon his personal property. Moreover, the remedy of self-help contemplates that the possessor be given some opportunity to collect his belongings. Nickens v. Mount Vernon Realty Group LLC, 54 A.3d 742 (Md. 2012).

FORECLOSURE: Sale of lots for $2,500, valued at $263,121 but subject to senior liens, is not set aside as grossly inadequate. A bondsman foreclosed on a judgment against Warren on a forfeited bond in the amount of $5,120. At the time of sale, the total amount due was $7,693, which included interest and fees. On the sale date, Warren tendered the full amount due under the original judgment but did not include the interest and fees. The Master in Equity issued a deed to the purchaser for all of Warren’s property, consisting of 13 tracts of land sold as a single lot, for $2,500. Warren challenged the sale, pointing out that tax assessment records reflected a combined value of the lots as $263,121. The court held that this did not establish that the bid was so grossly inadequate as to shock the conscience. The court agreed with the Master’s calculation—that the existing $88,000 mortgage, $12,000 in tax liens, and the bid price—totaled 39% of the property’s assessed value. Buyers at judgment execution sales take subject to senior liens. A dissent believed that the Master violated the principles of equity by selling more lots than were necessary to satisfy the judgment. Arrow Bonding Co. v. Warren, 732 S.E.2d 622 (S.C. 2012).

MORTGAGE PRIORITY: Foreclosure of mortgage discharges prior judgment lien, but lien is paid from sales proceeds before mortgage debt. A creditor’s judgment against a homeowner for $16,000 was recorded as a property lien on December 21. A mortgage from the homeowner and his wife, securing a $168,000 loan, was recorded on December 29. Following the mortgage foreclosure sale, the sheriff sent the entire foreclosure proceeds of $133,000 to Eastern Savings, leaving no excess for the judgment lienor. The judgment lienor sued Eastern Savings to recover the amount of its lien. In ruling for the judgment lienor, the court explained that real property sold at a sheriff’s sale is taken free of all nonmortgage liens on the land, which means that judgment liens are discharged at the sale, whether or not the proceeds are sufficient to pay all of them. Two statutes seek to make lands sold at foreclosure more alienable. Del. Code Ann. tit. 10, § 4985 provides that a purchaser takes the property free of all liens, except mortgages that are prior to any general liens. Del. Code Ann. tit. 10, § 5066 provides that land sold after foreclosure shall be discharged from all encumbrances incurred by the prior owner. But, even though the judgment lien was necessarily discharged, because it had recording priority, it was entitled to be satisfied from the sales proceeds before the later-recorded mortgage. Eastern Sav. Bank, FSB v. CACH, LLC, 55 A.3d 344 (Del. 2012).

PREMISES LIABILITY: Restaurant may be liable for wrongful death caused by patron’s use of exit driveway as shortcut entry. A restaurant patron attempted to make an illegal left turn, over two lanes of highway, into a narrow driveway serving as an exit from a drive-through window at a Wendy’s restaurant. He collided with Mickelson, who was traveling straight on a motorcycle. Mickelson’s estate brought a wrongful death action against Wendy’s, alleging that the exit lane was a structure or artificial condition that posed an unreasonable harm to travelers. Wendy’s argued that it had no control over third parties to prevent car accidents or improper driving. The trial court granted Wendy’s motion to dismiss, but the supreme court reversed, finding the lower court’s reading of the complaint to be unduly narrow. In determining whether a duty exists, it was necessary to consider the relationship between the parties as well as fairness and equity in requiring a party to act in a specified way so as to avoid undue risk of harm to third parties. It was fair to place a duty on Wendy’s because its customers regularly drove across two lanes of oncoming traffic to reach the restaurant via the exit lane, a condition likely to result in traffic accidents and serious injury. Wendy’s was in a much stronger position to bear the burden of avoiding the risk than travelers on the highway. This duty was owed to those entering and exiting the restaurant and to those like Michelson who might be affected by those entering and exiting. The court did not address what particular acts by Wendy’s would have fulfilled its duty of care. Estate of Mickelson v. North-Wend Foods, Inc., 274 P.3d 1193 (Alaska 2012).

PROPERTY INSURANCE: Insured may recover both costs of repair to building and post-repair diminution in building’s value resulting from repairs. Royal Capital filed a claim under its insurance policy for damages to its commercial building caused by construction activity on an adjacent property. The insurer acknowledged that the damage to the building was a covered loss, but refused coverage for alleged diminution in value to the building on account of having been repaired. The court held that the insurance contract required the insurer to pay for the “diminution in value” in excess of the estimated costs of repair. Whether damages for diminution in value are recoverable depends on the specific language of the insurance contract, read using general principles of contract construction. The court explained that diminution in value is an element of damage, an alternative to, although often interchangeable with, the cost of repair. The long-standing rule is that when “[an] insurance policy, drafted by the insurer, promises to pay for the insured’s loss, what is lost when physical damage occurs is both utility and value; therefore, the insurer’s obligation to pay for the loss includes paying for any lost value.” Royal Capital Dev. v. Md. Cas. Co., 728 S.E.2d 234 (Ga. 2012).

REGULATION OF ATTORNEYS: Closing attorney is not liable to borrower for erroneous information when she merely recited details from lender’s closing instructions. Borrowers obtained a commercial loan through a mortgage broker, with whom they had dealt on two previous occasions. As in the past transactions, the mortgage broker selected the Wilkinson Law Offices to serve as settlement agent for the closing. Although the previous loans did not involve a prepayment penalty provision, the borrowers understood the penalty to be a little over $13,000. The borrowers had not received any closing documents in advance. At closing, the settlement agent read from funding instructions prepared by the lender, which described a 5% prepayment penalty if the balance was repaid during the first five years. Borrowers intended to repay as quickly as possible and believed this term was consistent with what the broker had represented. Believing it a routine closing, they signed the documents, including the promissory note, without reading them, even though they had an opportunity to do so. The settlement agent did not point out the prepayment penalty provision in the promissory note before the borrowers signed. It turned out that the prepayment penalty provision in the note was markedly different from that in the funding instructions—instead of being $13,000, it was over $100,000. The borrowers sued the mortgage broker and the Wilkinson Law Offices for negligent misrepresentation. The mortgage broker was found liable to the borrowers, but not the Wilkinson Law Offices. The court found that the attorney did not misrepresent any facts because she only restated the information in the funding instructions and did not address whether that information was consistent with the underlying documents. She made no additional comments on the import of the prepayment provision, other than that they were standard in commercial loans and that 5% of the balance paid did equal $13,000. Because the borrowers only alleged negligent misrepresentation, the court did not address the issue of whether the attorney had any duty to the borrowers, even though they were not her clients, to examine the documents to ensure their compatibility with the loan summary. At a minimum, a closing attorney dealing with unrepresented parties should impress on them that she was not looking to protect their interests and that they should proceed with caution. St. Louis v. Wilkinson Law Offices, P.C., 55 A.3d 443 (Me. 2012).

WATER: Conveyance of land on a pond or stream, absent clear contrary intent, goes to center of water and includes underlying land. Adjacent landowners, the Hughes and the Knapps, both claimed exclusive ownership of the land under Perch Pond. Both lots derived from a common grantor. A 1968 deed conveyed the land “along the edge of Perch Pond” and “any rights which [the grantor] may have in and to the lands under the waters of Perch Pond which bound and abut unto the lands hereinabove conveyed.” A 1973 deed in the Hughes’s chain of title echoed the first of the quoted phrases from the 1968 deed, but not the second. The Knapps argued therefore that the 1973 deed conveyed only the land next to the water and not the land under it and that all the submerged land once owned by the common grantor passed to their predecessor in title. The Court of Appeals of New York agreed with the Hughes. The long-standing rule is that a purchase of waterfront property is presumed to include the adjacent underwater land. Only clear, express language or a legal description reserving the underlying land will prevent the underlying land from passing with the abutting land. A grantor must say that the land under water is not conveyed, in those words or in words equally clear in meaning. This presumption derives from the long-held view that small, nonnavigable lakes and ponds are generally valuable only in their relation to the adjacent lands. Here, because the 1973 deed did not contain a “plain and express” reservation, it must be read as conveying the underwater land to the Hughes’s predecessor in title. Knapp v. Hughes, 19 N.Y.3d 672 (N.Y. 2012).

LITERATURE

Property Theory. The University of Pennsylvania Law Review has published a symposium issue on “New Directions in Property Theory,” featuring contributions from a number of leading property scholars. This review will describe the articles’ original contributions to property theory and their relevance to the practice of property law.

“Governance Property.The lead article by Prof. Gregory S. Alexander introduces the concept of Governance Property, 160 U. Pa. L. Rev. 1853 (2012). Alexander suggests that the traditional understanding of “exclusion property” focuses on the external nature of a single owner’s rights to control property, which fails to give a fuller account of the internal relationships among property owners—a concept that he describes as “governance property.” Given the increasing reality of multiple owners of property in society (for example, in domestic relations and housing, neighborhoods and communities, and businesses), it makes sense to focus more on developing norms and rules that will facilitate greater coordination among owners and will have a better likelihood of protecting the various owners’ expectations. This article builds on Alexander’s recent work on the social-obligation norms of property ownership and on property as a means toward human flourishing. Thinking in terms of governance property can allow lawyers to have a broader understanding of their clients’ rights and interests in co-owned property and to help them achieve better results than would come from focusing only on individual rights to exclude.

Quasi-property. Prof. Shyamkrishna Balganesh also offers some original thoughts on the right to exclude, with respect to the concept of “quasi-property,” a term that has been used in leading intellectual property cases but has yet to be adequately explained. In Quasi-Property: Like, But Not Quite Property, 160 U. Pa. L. Rev. 1889 (2012), Balganesh observes that we recognize a functional exclusionary right in certain situations that lack the typical in rem property relationship for various reasons, including preserving the value of particular efforts and expanding remedial options. This situation results in one party’s ability to exclude not the entire world, but rather only certain other parties based on their relationship to intangible things, such as ideas or information, in which the law generally does not recognize property. In this sense, quasi-property uses norms from property law but functions much like tort law. Balganesh argues that a more explicit recognition of this category of quasi-property entitlements will produce greater analytical clarity in property law.

Enforcement of Property Rights. In their contribution to the Symposium, Profs. Abraham Bell and Gideon Parchomovsky make The Case for Imperfect Enforcement of Property Rights, 160 U. Pa. L. Rev. 1927 (2012). The authors challenge the assumption that state enforcement of private property rights is always optimal. Although economies of scale and scope often make state enforcement efficient, there are other times when it serves to distort investment decisions by owners. Using the concept of “moral hazard” primarily associated with insurance law, Bell and Parchomovsky argue for a degree of underenforcement of property rights in certain areas, for example, laws requiring “prepay” gasoline pumps (instead of policing against gasoline theft), formalities of copyright labeling, establishment of land boundaries, and protection of trade secrets. The authors compare such examples of imperfect enforcement to an insurance deductible: by forcing owners to bear some of the risk of loss, it can incentivize them to avoid unwise investments and to take reasonable precautionary measures to protect their property.

“Lumpy Property. Prof. Lee Anne Fennell proceeds from the observation that property tends to be a good that is useful only when it is provided in coherent thresholds or “lumps,” as in the length of a bridge or the four walls of a building. In Lumpy Property, 160 U. Pa. L. Rev. 1955 (2012), Fennell explores the reasons why property is lumpy, that is, contains “discontinuities” or “nonlinearities,” and then uses the concept to analyze property theory, including justifications for regulation and the theoretical value of the bundle-of-sticks metaphor. One of the interesting observations is that the lumpiness of property is one of the major factors preserving the relatively strict dichotomy between owning and renting as housing options (rather than facilitating a hybrid approach). Another is the effect on eminent domain practices resulting from the lumpiness of land assembly and its transaction costs, which leads to inefficient results. Similar problems arise in regulatory takings through the “reverse lumpiness” built into assumptions about which owners should receive compensation for loss of value. Fennell concludes with some preliminary thoughts on how lawyers might approach property decisions recognizing the importance of lumps.

The Urban Commons. The relation between property and local government has received more attention lately, and Prof. Nicole Stelle Garnett advances this scholarship in Managing the Urban Commons, 160 U. Pa. L. Rev. 1995 (2012). Starting with the theoretical concept of the tragedy of the commons, and using insights from leading property, economics, and sociology theorists over the past several decades, Garnett examines how these theories have undergirded policies for policing and urban development in American cities. Although it is an imperfect analogy, she compares the theoretical commons to the realities of managing urban public spaces such as streets, parks, and sidewalks and characterizes the current state as a compromise between countervailing pressures for coercive regulation and privatization. Noting currently looming resource constraints for local governments, Garnett provides a framework for analyzing future debates over the regulation of the urban commons in various contexts, using community policing and business improvement districts as readable examples of the modern tensions in property theory and government in managing public space.

Governing Through Owners. A prevalent assumption in property law generally, as well as in development theory, is that more robust individual property rights increase the freedom and economic power of individuals and correspondingly weaken the power of the state over individually owned property. Prof. Larissa Katz challenges this assumption in her article Governing Through Owners: How and Why Formal Private Property Rights Enhance State Power, 160 U. Pa. L. Rev. 2029 (2012). She argues that, in many cases, increased property rights can have the opposite effect of giving the state greater powers of control. In modern society, property ownership—with its essential characteristic of specific location—often comes with numerous legal obligations, such as maintaining infrastructure and securing public safety. Increasing the amount and the strength of formal property rights, therefore, can have the counterintuitive effect of allowing the state to exercise a greater regulatory role and to shift some of what would otherwise be the state’s burdens onto individuals. Katz’s contribution shows that the conventional wisdom is not entirely correct about how property rights mediate the relationship between the individual and the state.

The Property Strategy. We often think of property as a set of resources, but Prof. Thomas W. Merrill suggests that we consider the institution of property as itself a strategy about organizing how society uses resources. In The Property Strategy, 160 U. Pa. L. Rev. 2061 (2012), Merrill observes that from the most primitive to the most advanced societies, and from the largest scale civilizations to the mere household, people have always used the institution of property as a strategy for social organization. In this article he tries to find the common denominator across different times and places. He looks at the examples of the American family farm, Native American tribes, and the household to lay out what he determines are some of the most basic elements of property-as-strategy: decisions about which resources can be owned, to whom they should be distributed, and what rights of authority and access to confer on owners in relation to the other members of the society. Merrill then outlines some advantages common to the property strategy: its decentralized nature adapts well to local knowledge; it provides incentives for efficiency; it provides a foundation for an exchange economy; and it allows people to achieve personal goals. Drawbacks, however, include negative externalities, monopolies, increased risk, and social inequality. By thinking of property as a strategy, the legal profession will be more aware of the role that property law plays in society.

Economy of Concepts. The field of cognitive science has suggested that simple descriptions of general ideas can help people make sense of a complex world. Prof. Henry E. Smith explores whether and how these insights apply to property theory in his article, On the Economy of Concepts in Property, 160 U. Pa. L. Rev. 2097 (2012). Concepts such as “one cannot give that which one does not have” and that a landowner owns “to the heavens above and the depths below” have been helpful by offering a generalizable baseline understanding of how property works, which serve to reduce information costs. Reliance on concepts, however, risks oversimplification and the missing of important details regarding the underlying complexity of property law.

Strict Liability and Negligence. Some of the most interesting recent work in property theory has compared property and tort law. Prof. Stewart E. Sterk looks at property through the lens of tort liability standards in Strict Liability and Negligence in Property Theory, 160 U. Pa. L. Rev. 2129 (2012). Sterk notes that while some tort theorists have proposed that strict liability should become the default rule, negligence principles remain favored in personal injury law because negligence accounts for a victim’s ability to take precautions. Property, by comparison, seems to be the reverse: the predominant understanding of property is more akin to strict liability (for example, with its typically robust focus on the right to exclude and on clear boundaries). Sterk observes that many if not most property claims—like tort claims—involve requests for relief from a stranger’s interference. Should the reasonableness of the defendant’s actions be taken into account? Sterk asserts that courts often do just that, if only implicitly. The article examines the potential application of negligence to claims traditionally regarded as lying on the tort/property boundary, such as trespass and nuisance; it also extends the comparison and the implication to other areas such as title claims and intellectual property. Sterk concludes that in cases in which there are high costs of ascertaining and enforcing strict property liability, property law should openly incorporate negligence principles of reasonableness.

Absolute and Relative Preferences. Different people have different values when it comes to gains and losses: some people care primarily about the absolute size of their slice of pie, while others are more concerned with the relative size of their slice compared with others. Prof. Lior Jacob Strahilevitz applies this observation from behavioral economics to property in his article Absolute Preferences and Relative Preferences in Property Law, 160 U. Pa. L. Rev. 2157 (2012). Strahilevitz examines cases in inheritance law to show that the distinction between absolute and relative preferences can help explain what otherwise seem to be drastically different results in similar cases. He goes on to suggest that this divergence in what people want and expect from property also might inform takings doctrine (particularly when courts are asked to apply balancing tests) as well as disputes over easements and waste. Lawyers can use the insights from this article to seek a better understanding of their clients’—and their adversaries’—desires and interests in property disputes.

Emerging Technologies. In the final contribution to the symposium, Prof. Christopher S. Yoo examines the implications of new property rights that have derived from technology. In Beyond Coase: Emerging Technologies and Property Theory, 160 U. Pa. L. Rev. 2189 (2012), Yoo focuses on the increasing interdependency and complexity of property rights in technological advancements, in particular the Internet and electric power grids. Ronald Coase’s pathbreaking law-and-economic insights included observations on the nature of property rights in “spectrum” resources. Moving beyond the traditional exclusion-versus-commons debate, Yoo builds on the spectrum analysis to suggest that in our increasingly high-tech world, the allocation of new property rights should account for a more interdependency-based vision of property rights, the best response to the cumulative nature of interference. Such a regime would include a greater role for coordination of spectrum resources through bargaining. This recognition of complexity and interdependency leads to an original way of conceptualizing property rights generally. Most property lawyers are fully aware of the challenges and opportunities that emerging technologies offer to the economy and to legal practice, and Yoo’s article offers a helpful framework for incorporating them into our property law.

LEGISLATION

DELAWARE amends residential property insurance code to require specific notice of deductibles. The amendments prescribe a form for giving clear and prominent notice to homeowners of deductibles for losses from wind, hail, and hurricane events. The notice may be sent electronically to any policyholder who has consented to receive such notices in this fashion and must clearly disclose relevant details pertaining to the deductibles, including the trigger for the deductible, regardless of whether it is stated as a percentage or as a dollar amount. If there is a percentage deductible, the insurer must provide an example of how it applies to the loss. 78 Del. Laws 386.

DISTRICT OF COLUMBIA adopts Uniform Real Property Transfer on Death Act. A transfer on death deed is effective without notice or delivery to or acceptance by the designated beneficiary during the transferor’s life and without consideration, but must be recorded during the life of the transferor. A transfer on death deed transfers property without covenant or warranty of title even if the deed contains a contrary provision. It is revocable at any time and does not give the transferee any present rights over the property. 2011 D.C. Act 547.

LOUISIANA amends law to allow construction contractsto require indemnification. The amendments provide for enforcement of clauses in construction contracts that contain the promise to indemnify, defend, or hold harmless the indemnitee or agent if the contract also requires the indemnitor to obtain insurance to insure the obligation to indemnify and there is evidence that the indemnitor recovered the cost of the required insurance in the contract price. The indemnitor’s liability is limited to the amount of the insurance proceeds, and the insurance may cover liability only when the indemnitor is at least partially at fault or otherwise liable for damages in tort. 2012 La. Acts 684.

LOUISIANA requires mortgagees to maintain abandoned foreclosed property. The law authorizes municipalities to adopt ordinances requiring mortgagees to maintain foreclosed residential properties in a safe and sanitary condition. The act prescribes factors for determining abandonment, including overgrown or dead vegetation; accumulation of newspapers or mail; past due utility notices or disconnected utilities; accumulation of trash, junk, or debris; the absence of window coverings such as curtains, blinds, or shutters; the absence of furnishings or personal items consistent with residential habitation; and statements by neighbors, passersby, delivery agents, or government employees that the property is unoccupied. It defines maintenance to include repairing or replacing broken glass windows, exterior doors, shutters and siding, and fences and maintaining or covering swimming pools and hot tubs. It gives a mortgagee the right to enter to perform this maintenance and provides immunity from liability to mortgagors for loss by reason of such maintenance. 2012 La. Acts 692.

LOUISIANA expands meaning of right of passage in private condemnation law to include access for utilities. The access is that suitable for the kind of utility reasonably necessary for the use of the dominant estate. The dominant owner must compensate and indemnify the servient owner for the value of the access and against damage. The right of passage must be taken along the shortest route from the enclosed estate to the utility and at the location least injurious to the intervening lands. 2012 La. Acts 739.

MICHIGAN allows recording of affidavits to correct defects in recorded instruments. The act permits a person with knowledge of the relevant facts to correct errors and omissions relating to the proper place of recording, scrivener’s errors, and scrivener’s omissions. The affidavit does not alter the substantive rights of any party unless it is executed by that party. 2012 Mich. Pub. Acts 336.

PENNSYLVANIA amends Manufactured Home Community Rights Act. The amendments provide for the creation of an association of residents and expand the rights and duties of both operators and the residents in case of abandonment by a resident. In the event of a decision to close the community, the amendments also require 60 days’ notice to residents, good faith consideration of an offer to purchase from the resident association or nonprofit corporation, and the payment of relocation expenses, in addition to $2,500 or the appraised value of the manufactured home for each resident. 2012 Pa. Laws 156.

PENNSYLVANIA adopts Uniform Real Property Electronic Recording Act. Local recorders are given the authority to provide for access to, and for search and retrieval of, documents and information by electronic means. Recorders must continue to accept nonelectronic documents as authorized by state law and must place entries for both types of documents in the same index. A recorder may convert nonelectronic paper documents accepted for recording into electronic form and may convert into electronic form information recorded before the recorder began to record electronic documents. 2012 Pa. Laws 100.

RHODE ISLAND protects “Homeless Status” under its Fair Housing Act. The act creates a “Homeless Bill of Rights” that protects against abridgment or denial of public services on account of the status of being homeless, ensures freedom to use public facilities and spaces, including parks and public buildings, and facilitates the right to vote. The legislation, however, does not purport to undertake to provide housing for these homeless persons. 2012 R.I. Pub. Laws 356.

RHODE ISLAND amends Real Estate Sales Disclosures Law to give a purchaser a 10-day period to inspect premises. The amendments require that every contract for the purchase and sale of real estate provide that the purchaser shall have 10 business days to conduct an inspection of the property and any structures before the purchaser becomes obligated. The parties can agree on a different period of time or a purchaser can waive the right in writing. The failure to include the provision entitles the purchaser to void the contract by notice, in writing, to the seller before the transfer of the title at a closing. 2012 R.I. Pub. Laws 375.

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