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: Cleanup liability. When state law requires an owner to clean up contaminated property, the court will not approve a debtor's plan that does not provide for remediation costs. In re Lewis, 215 B.R. 880 (D. Alaska 1997).
CONDOMINIUM: Rights of buyer at foreclosure sale. Buyer of a developer's interest in the common areas and remaining property at a foreclosure sale was an assignee of the developer's rights to develop the prop-erty in accordance with an approved planned unit development. The court reasoned that the buyer takes subject to prior liens and the prior declarations and bylaws of the association and should, therefore, have the rights of the developer. Board of Managers of the Medinah on the Lake Homeowners Assoc. v. Bank of Ravenswood, 692 N.E.2d 402 (Ill. Ct. App. 1998).
- COVENANTS: "Approval clause" without specific standards. A developer's declaration of covenants required approval before a mobile home could be placed on a lot. The covenant was enforceable under a general standard of reasonableness. Failure to provide specific standards for granting approval was not fatal. Cypress Gardens, Ltd. v. Platt, 952 P.2d 467 (N.M. Ct. App. 1997).
- DEEDS: Covenant against encumbrances. After a warranty deed passed from the seller to the buyer, the buyer's lawyer learned of back taxes owed by the seller and paid them. She then sued the seller for unjust enrichment and breach of warranty of title. The court held that the lawyer could not recover on an unjust enrichment theory for her purely voluntary payment of taxes. Her breach of warranty claim failed even though she received an assignment of the claim from the buyer because the buyer no longer owned the property. Benton v. Gaudry, 496 S.E.2d 507 (Ga. Ct. App. 1998).
- DOWER: Inchoate right vests at husband's death. A husband conveyed property to his children without his wife's consent. When he died, her inchoate right vested and she was entitled to her share. When the court could not divide the property, sale was appropriate, with proceeds divided to compensate the widow for her share. Webber v. Webber, 962 S.W.2d 345 (Ark. 1998).
- EMINENT DOMAIN: Compensation; when taking occurs. A utility company brought a condemnation action and entered the property before paying compensation. The date of the taking is deemed to be the date of entry, and even though the owner later enters into a contract of sale, the owner is entitled to the condemnation award. The right to the condemnation award does not run with the land. Argier v. Nevada Power Co., 952 P.2d 1390 (Nev. 1998).
- EMINENT DOMAIN: Partial taking; valuation. An Oklahoma statute providing for a "before and after" method of evaluation in partial takings was unconstitutional because just compensation requires payment of the value of property taken plus damages for injury to property not taken. Williams Natural Gas Co. v. Perkins, 952 P.2d 483 (Okla. 1997), reh. denied (1998).
- ENVIRONMENTAL LAW: CERCLA; Disposal. Noting that the Ninth Circuit has not decided the issue and other circuits are split, a California federal district court rejected the passive migration theory of disposal under CERCLA. Carson Harbor Village, Ltd. v. Unocal Corp., 990 F. Supp. 1188 (C.D. Cal. 1997).
- LANDLORD AND TENANT: Negligence. Under a Louisiana statute, the owner of leased premises is not liable for injury if the lessee assumes responsibility for the condition of the leased premises, unless the owner knew or should have known of a defect. The court of appeals recently held that the statute's "should have known" language did not impose a duty to inspect on the absentee landlord. Chua v. Takee Outee of Bourbon, Inc., 707 So. 2d 495 (La. Ct. App. 1998).
- LANDLORD AND TENANT: Sub-sublessee holding over. Applying Massachusetts law, the U. S. Court of Appeals held that when a sublease expires, the sub-sublessee remains in possession and the sublessor does not accept rent from the sublessee, the sub-sublessee is a tenant at sufferance. The sub-sublessee is liable for the reasonable worth of its use and occupancy, which may be but is not necessarily the rent stipulated in the sub-sublease. Dale v. H.B. Smith Company, Inc., 136 F.3d 843 (1st Cir. 1997), reh. denied (1998).
- NUISANCE: Disorderly house. Applying the term "disorderly house" to a crack house, a federal district court concluded that a disorderly house nuisance exists if use of the property affirmatively disturbs the public or is openly vexatious or if the property is considered to be inherently a nuisance by the nature of the conduct transpiring therein, whether or not the property is affirmatively bothersome. United States v. Wade, 992 F. Supp. 6 (D.D.C. 1997).
- PARTITION: Best price; use of broker. A court-ordered partition sale must be conducted so as to bring the best price obtainable. When fact finding indicated that sale using a real estate broker would bring the highest price, the chancellor erred in ordering sale at public auction. Orgain v. Butler, 496 S.E.2d 433 (Va. 1998).
- TREES: Liability for falling tree. An urban land-owner was not liable when a tree on her property fell and killed passing motorists because the tree had no visible, apparent or patent decay. The court of appeals noted that the prevailing rule distinguishes rural owners from urban owners and imposes a standard of reasonable care on the latter but noted further that the tree owner has no duty to check constantly for invisible rot. Wade v. Howard, 1998 WL 128501 (Ga. Ct. App. 1998).
- TRESPASS: Damages. The plaintiffs buried their wife and mother in the church cemetery with the church's permission. Competing claimants for the gravesite later claimed they owned the burial lot. The claimants then placed slabs next to the decedent's grave, preventing the plaintiffs from erecting a headstone and potentially preventing the husband from being buried beside his wife at his death. The court upheld a jury award of $375,000 for continuing trespass, injuring the plaintiffs' peace, happiness and feelings and ordered removal of the grave slabs. Moody v. Dykes, 496 S.E.2d 907 (Ga. 1998).
- ZONING AND PLANNING: Historic zone; ban on educational institution. Noting the inherently beneficial nature of educational institutions, the court held that an absolute ban on such institutions exceeded the city's authority. The municipality must weigh the benefit of the educational institution against the interest of historic preservation. Trustees of Union College v. Schenectady City Council, 690 N.E.2d 862 (N.Y. 1997).
- ZONING AND PLANNING: Signs; new name plate requires new permit. When ownership of a business changed, the replacement name plate with the name of the new owner was a new sign requiring a permit. Ad Craft, Inc. v. Board of Zoning Appeals of Evansville and Vandenburgh County, 693 N.E.2d 110 (Ind. Ct. App. 1998).
- Exception to § 6045(e) reporting requirements. The IRS has set forth the assurances a seller must provide in a written certification to avoid the information reporting requirements (i.e., filing a Form 1099-S, Proceeds from Real Estate Transactions) on the sale of a principal residence. They are: (1) the seller owned and used the residence as the seller's principal residence for periods aggregating two years or more during the five year period ending on the date of the sale or exchange of the residence; (2) the seller has not sold or exchanged another principal residence during the two year period ending on the date of the sale or exchange of the residence (not considering any sale or exchange before May 7, 1997); (3) no portion of the residence has been used for business or rental purposes by the seller (or the seller's spouse if the seller is married) after May 6, 1997; (4) at least one of the following three statements applies: (a) the sale or exchange is of the entire residence for $250,000 or less; (b) the seller is married, the sale or exchange is of the entire residence for $500,000 or less and the gain on the sale or exchange of the entire residence is $250,000 or less; or (c) the seller is married, the sale or exchange is of the entire residence for $500,000 or less and (i) the seller intends to file a joint return for the year of the sale or exchange, (ii) the seller's spouse also used the residence as his or her principal residence for periods aggregating two years or more during the five year period ending on the date of the sale or exchange of the residence, and (iii) the seller's spouse also has not sold or exchanged another principal residence during the two year period ending on the date of the sale or exchange of the residence (not considering any sale or exchange before May 7, 1997). Rev. Proc. 98-20, 1998-7 I.R.B.32 (Feb. 17, 1998), 1998 WL 43414 (I. R.S.).
- PARKING TOWERS: § 168 accelerated cost recovery. The towers, consisting of an automobile carousel mechanism and a supporting tower structure, are tangible personal property in the nature of machinery for depreciation purposes, the IRS ruled. Significant to the ruling was the fact that the carousel and the supporting tower structure formed a unit to store automobiles, which neither could do by itself. Because of their closely related design, construction and function, they were not treated as separate properties. The IRS also noted that a supporting tower could not be easily adapted to another use, there was no working space for employees inside it and the tower could be easily disassembled and set up at another location. PLR 9751010 (Sept. 19, 1997).
- ENVIRONMENTAL LAW. A symposium entitled Environmental Protection and the Politics of Property Rights, reviews and analyzes the conflicts between environmental protection and private property rights. Included are articles by Zee Trachtenbery, Andrew H. Sawyer, John D. Echeverria, James L. Huffman and Drew L. Kershen. 50 Okla. L. Rev. 303 (1997).
- ENVIRONMENTAL LAW: Ethics. Irma S. Russell explores the lawyer's duty of confidentiality when faced with a client whose activities present an environmental hazard that threatens others in Unreasonable Risk: Model Rule 1.6, Environmental Hazards, and Positive Law. 55 Wash. & Lee L. Rev. 117 (1998).
- LAND USE. A symposium entitled Land Use Law and the 21st Century: Practices, Policies and Paradigms, 12 J. Envtl. L. & Litig. 1 (1997), includes articles by Edward J. Sullivan, Marc R. Poirer and Joan L. McGregor.
- MORTGAGES: Guarantors. Although the title indi-cates that California law is the subject, An Overview of Defenses Available to Guarantors of Real Property Secured Transactions Under California Law by Maxwell M. Freeman and Elizabeth Freeman Gures provides valuable insights on defenses available to guarantors of real estate mortgages. 38 Santa Clara L. Rev. 329 (1998).
- MORTGAGES: Mortgage brokers; fiduciary duties. A student article by David Unseth, What Level of Fiduciary Duty Should Mortgage Brokers Give Their Borrowers?, 75 Wash. U.L.Q. 1737 (1997), analyzes the fiduciary duties of brokers with emphasis on mortgage brokers. The author concludes that mortgage brokers are already adequately regulated and that there is no need for imposing additional fiduciary obligations.
- MORTGAGES: Reverse mortgages. Charles Nauts and David A. Bridewell have collected and edited 12 articles under the title of Reverse Mortgages_A Lawyer's Guide to Housing and Income Alternatives (1997). The ABA Senior Lawyers Division sponsored the book, which should be particularly helpful to lawyers advising senior citizens.
- REGULATORY TAKINGS. In 1997 Regulatory Takings Quartet: Retreating from the "Rule of Law," 42 N.Y.L.S. L. Rev. 345 (1998), Steven J. Eagle analyzes recent New York Court of Appeals cases holding that preexisting regulations inhere in a buyer's title and preclude the buyer from forming investment-backed expectations in the prohibited uses. Eagle concludes that this approach is inconsistent with regard for private property and the Supreme Court's view of background principles of property law.
- TAKINGS. Douglas T. Kendall and Charles P. Lord focus on how and why the doctrinal shift in takings law has occurred in the last decade in The Takings Project: A Critical Analysis and Assessment of the Progress So Far, 25 B.C. Envtl. Aff. L. Rev. 509 (1998).
- TAKINGS. In The Need for Takings Law Reform: A View from the Trenches_A Response to "Taking Stock of the Takings Debate," 38 Santa Clara L. Rev. 837 (1998), Michael M. Berger and Gideon Kanner discuss the problems caused by overzealous regulators and extreme regulations, and explore why regulators oppose legislative reform.
- TAKINGS. Matthew Clifford and Thomas Huff describe how the continuing problems of takings law reflect conflicting views of private property in An Essay on 'Takings," 59 Mont. L. Rev. 9 (1998).
Alaska adopts community property. The law is based on the Uniform Marital Property Act but has significant differences, e.g., community property principles apply only when the couple has an explicit community property agreement. Alaska Stat. § 34-75-010 et seq.
Alaska bars baseless, politically motivated liens. The law forbids filing nonconsensual common law liens without specific court authorization, makes such filing a crime and provides for actual and punitive damages against the filer. Alaska Stat. §§ 09.38.500(9), 09.45, 11.46.550, 34.35.
Readers interested in a comprehensive review of current developments in real estate law are encouraged to subscribe to the ABA Real Estate Quarterly Report, which is prepared by the Real Property Division's Decisions Committee. For more information on this publication, contact the Section office at (312) 988-6233.
Keeping Current_Property Editor: Nicholas L. White, School of Law, University of Memphis, Memphis, TN 38152. Contributing editors: Ralph Brashier, Robert L. Flores and Lars Gustafsson.
Probate & Property Magazine is published six times annually and is included in section members' annual dues.