Keeping Current-Property offers a look at selected recent cases, rulings and regulations, literature and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.
- BANKRUPTCY: Homestead exemption. A debtor domiciled in California for more than 180 days before filing his petition was entitled to claim an automatic homestead exemption of $75,000 under California law even though his residential real estate was in Michigan. In re Arrol, 207 B.R. 662 (N.D. Calif. 1997).
- BROKERS: Misrepresentation. Under the New Jersey Consumer Fraud Act, a brokerage firm was liable for its agents' affirmative misrepresentations about the workmanship of the builder whose houses it marketed despite the lack of evidence that the agents knew of their misrepresentations or that purchasers relied on such misrepresentations. Gennari v. Weichert Co. Realtors, 691 A.2d 350 (N.J. 1997).
- CONDOMINIUMS: Golfer's liability for errant shot. Plaintiff's home, adjacent to a golf course, was hit about 10 times a day by poorly hit golf balls. When she was hit while in her yard, she brought a negligence action against the golfer. On a question of first impression, the court held that a golfer owes a duty of care to persons living in residences immediately adjacent to the golf course who are known by the golfer to be within the normal striking distance for the golf shot being played. Hennessey v. Pyne, 694 A.2d 691 (R.I. 1997).
- CONDOMINIUMS: Owner's injury in common area. Determining first that the action sounded in tort and not in contract, the court followed precedent and held that a member of an unincorporated association cannot bring a tort action against the association. Strayer v. Covington Creek Condominium Ass'n, 678 N.E.2d 1286 (Ind. Ct. App. 1997).
- EASEMENTS: Unrecorded septic system easement. The common owner of two parcels constructed a building on one parcel and installed a septic system with lateral leach lines on the adjacent parcel. The court held that the adjacent parcel was impressed with an implied easement when the common owner conveyed first the dominant estate and then the servient estate. Because no sewage system was available, the court reasoned that the test of "apparent and obvious" was met. A dissent argued that the easement was not apparent and, being unrecorded, could not be enforced against a purchaser without knowledge. Diener v. Ratterree, 945 S.W.2d 406 (Ark. Ct. App. 1997).
- EMINENT DOMAIN: Mitigation of severance damages. On a question of first impression in New Jersey, the state high court held that a condemnee seeking severance damages in a partial taking condemnation action has a duty to mitigate those damages. The holding applies prospectively. New Jersey v. Weiswasser, 693 A.2d 864 (N.J. 1997).
- JOINT TENANCY: Felonious killing. Under a Michigan statute, a husband who murdered his wife while their divorce was pending did not lose his interest in joint tenancy property; therefore, he could transfer his half interest to his lawyer. Ponke v. Ponke, 564 N.W.2d 101 (Mich. Ct. App. 1997).
- LANDLORD AND TENANT: Distraint. The South Caro-lina Supreme Court held that a state statute permits a landlord to distrain a third party's personal property located on the premises in addition to the personalty of the tenant, overruling case law that might be read to the contrary. Tolemac, Inc. v. United Trading, Inc., 484 S.E.2d 593 (S.C. 1997).
- LANDLORD AND TENANT: Guest ban as breach of quiet enjoyment. Concerned with its responsibility to other tenants to keep unruly guests off the premises, the landlord by letter forbade a tenant's boyfriend from entering the premises after the boyfriend caused a disturbance and damages. The court held that the landlord's letter was a breach of the tenant's rights under a covenant of quiet enjoyment. A tenant has a right to invite social guests to his or her apartment but is responsible for their actions. Branish v. NHP Property Management, Inc., 694 A.2d 1106 (Pa. Super. Ct. 1997).
- LANDLORD AND TENANT: Landlord's duty to mitigate. A commercial lease provided that the landlord could, without terminating the lease, recover all rent as it became due. Applying contract principles to the lease, the court held that, in general, landlords have a duty to mitigate based on an implied covenant of good faith and fair dealing. The lease terms may, however, negate such a duty, as in this case. New Towne Ltd. Partnership v. Pier 1 Imports (U.S.), Inc., 680 N.E.2d 644 (Ohio Ct. App. 1996).
- LANDLORD AND TENANT: Liability for tenant's animals. A Maryland court, on a question of first impression in the state, held that a landlord is not liable in tort for damages to a tenant's social invitees caused by the tenant's vicious animal, and that a "no pets" provision in the lease does not create a duty on the part of the landlord to the invitees. The court noted the split of authority on this issue. Amberwood Assoc. Ltd. Partnership, Inc. v. Matthews, 694 A.2d 131 (Md. Ct. Spec. App. 1997).
- MECHANICS LIENS: "Pay if paid" provision. Reasoning that a waiver and release of mechanic's lien rights is permitted only in conjunction with payment or a promise of payment and is effective only if the claimant is actually paid, the court held that a "pay if paid" provision is invalid as against public policy and violates the anti-waiver provisions of California mechanic's lien law. Wm. R. Clarke Corp. v. Safeco Ins. Co. of Am., 938 P.2d 372 (Cal. 1997).
- MORTGAGES: Equitable subrogation. A senior mortgagee who releases the senior mortgage in a renewal situation, without intent to subordinate her senior mortgage, is entitled to be equitably subrogated and maintain priority over intervening liens. The senior mortgagee's actual knowledge of the intervening liens at the time of the renewal did not bar equitable subrogation. Rush v. Alaska Mortgage Group, 937 P.2d 647 (Alaska 1997).
- RESTRICTIVE COVENANT: Effect of res judicata. Tenant's action to enforce a covenant against use of adjoining premises for a restaurant was barred by res judicata when a default judgment had been entered against the landlord in a prior action seeking to abrogate the restrictive covenant. Bruns Foods of Morrilton, Inc. v. Hawkins, 944 S.W.2d 509 (Ark. 1997).
- RESTRICTIVE COVENANTS: Short-term residential rentals permissible. Owners of a beachfront home who rented it on a short-term basis did not violate covenants requiring the property to be used "exclusively for residential purposes" and not for "commercial enterprise." Yogman v. Parrott, 937 P.2d 1019 (Or. 1997).
- STATUTE OF FRAUDS: Parol gifts. Parents' parol gift of 240 acres of land to one of their six children, made when the donee was a teenager and more than three decades before the death of the surviving parent, was valid. The court noted that the transaction was taken out of the statute of frauds when the donee took possession and made improvements in reliance on the gift so that it would work a substantial injustice to hold the gift void. Mertz v. Arendt, 564 N.W.2d 294 (N.D. 1997).
- TRESPASS: Punitive damages. A manufacturer delivered a third party's mobile home across the owner's property, despite the owner's adamant protest. When the owner sued for intentional trespass, the jury awarded $1 in nominal damages and $100,000 in punitive damages. On a question of first impression, the Wisconsin Supreme Court held that nominal damages may support a punitive damages award in an action for intentional trespass to land. Jacque v. Steenberg Homes, Inc., 563 N.W.2d 154 (Wis. 1997).
- SELLER AND BUYER: Installment sale contract; fire insurance proceeds. Although the buyer under an installment sale contact was not a named insured under a fire insurance policy issued to the seller, buyer was subrogated to the seller's rights under the policy. The seller received insurance proceeds equal to the amount due under the installment contract and the buyer received the balance. King v. Dunlap, 945 S.W.2d 736 (Tenn. Ct. App. 1996).
- ZONING: Changed nonconforming use. An adja- cent owner had standing to challenge a change in a nonconforming use as a violation of the zoning code when he suffered damage peculiar to himself as compared to that sustained by the general public. Buckelew v. Town of Parker, 937 P.2d 368 (Ariz. Ct. App. 1996).
- ZONING: Denial of variance not taking. An owner who purchased property, knowing that a "steep slope" ordinance would prevent construction of a single-family residence on the lot, could not claim that a taking occurred when a variance was denied. Anello v. Zoning Bd. of Appeals of Dobbs Ferry, 678 N.E.2d 870 (N.Y. 1997).
- ZONING: Island town; large lot zoning upheld. Citing the unique qualities of the island of Martha's Vineyard and its historical, cultural and ecological values, the court upheld three-acre zoning for about half of Edgartown. It concluded that preservation of these values outweighed the exclusionary effect of the large lot zoning. Johnson v. Town of Edgartown, 680 N.E.2d 37 (Mass. 1997). TAX DEVELOPMENTS
- DEDUCTIBLE BUSINESS EXPENSES: Employee relocation. The Tax Court held that a taxpayer may deduct the costs of selling homes for relocated employees. The taxpayer used relocation service companies that found buyers for the homes. Neither the taxpayer nor the relocation service companies acquired legal title to the homes or beneficial ownership. Legal title passed from a relocated employee to the third-party buyer. The IRS' losing argument was that the taxpayer acquired title to the homes because the relocation service companies, as agents of the taxpayer, acquired the residences. Amdahl Corp. v. Comm'r, 108 T.C. No. 24 (June 17, 1997).
- INVOLUNTARY CONVERSION: Condemnation. The Tax Court held that 1033 does not allow for multiple replacement periods for a single condemnation. The taxpayer received condemnation proceeds of $9,000 in 1986. In 1991 the Florida Supreme Court ruled that the taxpayer was entitled to an additional $106,000 of condemnation proceeds. In 1993 the taxpayer purchased real estate and made a 1033 election. Because the replacement period, which began in 1986, had expired and the taxpayer had not requested an extension under 1033, the Tax Court denied 1033 deferral of gain treatment. Shipes v. Comm'r, T.C.M. (CCH) 2 (1997).
- INVOLUNTARY CONVERSION: Dissimilar property. The IRS ruled that a taxpayer did not have an involuntary conversion under 1033 that avoided gain recognition because the replacement property was not similar or related in service or use to the destroyed property. The taxpayer replaced a rental apartment building destroyed by fire with a motel. PLR 9723032 (Mar. 10, 1997).
- NONRECOGNITION: Sale of principal residence. A newly married taxpayer was not entitled to 1034 non-recognition treatment when he sold his house and used the proceeds to reduce the mortgage on his new wife's house, in which they were living. The court drew this conclusion because the taxpayer never obtained record title to any interest in his wife's house. Kirst v. Comm'r, T.C.M. 1997-353.
- Eminent domain; temporary physical takings. After a concise comparison of permanent physical takings and regulatory takings, Dennis H. Long analyzes the competing theories applying to temporary physical takings in The Expanding Importance of Temporary Physical Takings: Some Unresolved Issues and an Opportunity for New Directions in Takings Law, 72 Ind. L. J. 1185 (1997).
- Fair Housing Act. In Government Lawyers and Their Private 'Clients' Under the Fair Housing Act, Eugene R. Gaetke and Robert G. Schwemm discuss the problems of the triangular relationship, created by the 1988 Fair Housing Act amendments, between government lawyers and their public and private clients. 65 Geo. Wash. L. Rev. 329 (1997).
- First Amendment. Mark Cordes examines the relationship between real property and speech in Property and the First Amendment, 31 U. Rich. L. Rev. 1 (1997).
- Land use. The spring issue of The Urban Lawyer includes a symposium on urban sprawl, with articles by Robert W. Burchell, Robert H. Freilich, Bruce G. Peshoff, David Listokin, Judy S. Davis, Samuel Seskin and Charles L. Siemon. 29 Urb. Law. 157 (1997).
- Land use and environmental law. Michael Allan Wolf provides a comprehensive analysis of multi-layered land use controls and environmental regulation in Fruits of the "Impenetrable Jungle": Navigating the Boundary between Land-Use Planning and Environmental Law. A table setting forth federal acts with nuisance-like attributes is particularly helpful. 50 Wash. U. J. Urb. & Contemp. L. 5 (1996).
- RESPA; excessive escrow. In An Implied Cause of Action Under the Real Estate Settlement Procedures Act, Christopher L. Sogers argues that 10 of RESPA implies that a cause of action for damages exists when the escrow account for taxes and insurance held by the mortgagee significantly exceeds the amount needed to cover those expenditures. 95 Mich L. Rev. 1381 (1997).
Keeping Current_Property Editor: Nicholas L. White, School of Law, University of Memphis, Memphis, TN 38152. Contributing editors: Ralph Brashier, Lars Gustafsson and David A. Thomas.
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