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.
- BROKERS: Due process. The court dismissed a real estate broker's reprimand for failing to obtain dual agency consent because the real estate licensing commission failed to act within the statutory time guidelines. The court rejected the commission's argument that the broker had received a full hearing and held that the 196 day delay in scheduling a hearing deprived the broker of due process. Royer v. Ohio Real Estate Comm'n, 722 N.E.2d 172 (Ohio Ct. App. 1999).
- EASEMENTS: Liability insurance. An insured who fraudulently obtained an easement tendered defense to his liability insurance company when the grantor of the easement sued. The court held that the insurance policy, which covered "wrongful entry or eviction or other invasion of the right of private occupancy" did not apply, because a mere right to enter was at issue rather than an actual physical invasion. Sterling Builders, Inc. v. United Nat'l Ins. Co., 93 Cal. Rptr. 2d 697 (Cal. Ct. App. 2000).
- EASEMENTS: Scope. When the boundaries of an easement are specifically defined, the dominant estate holder is entitled to use all of the area that the easement encompasses, regardless of its size and what is reasonable or necessary. Thus, the servient estate holder may be required to remove fixtures erected after the easement was granted. Lamb v. Wyoming Game and Fish Comm'n, 985 P.2d 433 (Wyo. 1999).
- FAIR HOUSING: Punitive damages. A jury entered a verdict against a landlord for housing discrimination, but awarded no economic damages. The court held that the lack of economic damages would not prevent an award of punitive damages, because a finding of discrimination alone was sufficient. The court declined, however, to impose punitive damages on an absentee owner who made good faith (albeit unsuccessful) attempts to prevent discrimination by the on-site property manager. Alexander v. Riga, 208 F.3d 419 (3d Cir. 2000).
- IMPROVEMENTS: Subway construction. Construction of a subway tunnel under the landowner's property was not an "improvement" for purposes of determining whether a trespass action was time-barred under the statute of limitations. The court reasoned that a subway system, unlike a sewer system or traffic intersection, does not have any "actual relation" to the use or enjoyment of the real property located above it so that its presence could be considered an improvement. Bank of Ravenswood v. City of Chicago, 717 N.E.2d 478 (Ill. App. Ct. 1999).
- LANDLORD AND TENANT: Assignments. The as-signor of a lease had no liability from the default of the assignee following the assignee's bankruptcy, where the assignee and the landlord executed a settlement agreement that released assignee's predecessors in interest from liability. American Nat'l Trust Co. v. Kentucky Fried Chicken, 719 N.E.2d 201 (Ill. App. Ct. 1999).
- LANDLORD AND TENANT: Excusable neglect. A commercial lessee who inadvertently mailed a past due rent payment to the wrong address, causing it to arrive after the payment deadline, could not plead the affirmative defense of excusable neglect. The mistake was not the result of anything done by the lessor or any other third party and therefore was held inexcusable. 2606 Building v. Mica, 994 P.2d 1226 (Or. Ct. App. 2000).
- LANDLORD AND TENANT: Implied warranty of habitability. The implied warranty in a residential lease did not support a tenant's personal injury action because the parties did not contemplate that the warranty would cover personal injuries. Although warranties may be implied in fact, they are defined by the understandings of the parties and thus can be waived by agreement. Johnson v. Scandia Assoc., Inc., 717 N.E.2d 24 (Ind. 1999).
- LICENSE: Trespass. The operator of a mobile home park on public land under a management agreement moved the internal boundaries for mobile homes. In rejecting a homeowner's claim for trespass against a neighbor, the court held that the management agreement created a license rather than a tenancy and that no title or possessory interest was transferred. Because the operator could not transfer an interest in property greater than it possessed, the homeowner did not have any title or possessory interest to defend. Qualls v. Lake Berryessa Enters., 91 Cal. Rptr. 2d 143 (Cal. Ct. App. 1999).
- MORTGAGES: Assignment of rents. A debtor who executed a mortgage in 1983 had vested rights under Florida law, which at the time required judicial intervention before seizure of rents. A 1987 law that arguably allowed seizure of rents after mere demand on the debtor could not retroactively impair the vested rights. In re Ormond Beach Assoc. LP, 184 F.3d 143 (2d Cir. 1999).
- MORTGAGES: Due on sale clause. A mortgage stating that any transferee of the mortgaged property would be personally liable to pay the mortgage debt without an assumption of the debt was ineffective, because the debt obligation does not run with or touch and concern the land. I n re Ormond Beach Assoc. LP, 184 F.3d 143 (2d Cir. 1999).
- MORTGAGES: FIRREA. The court stated in dictum that under FIRREA a successor mortgagee would take the mortgage free of the penalties accruing against the FDIC during its ownership of the mortgage. The court reasoned that unless the FDIC's freedom from penalties was passed on, the FDIC would be paid less for the assignment of the note and the mortgage. National Loan Investors L.P. v. Town of Orange and Water Pollution Control Auth., 204 F.3d 407 (2d Cir. 2000).
- MORTGAGES: Prepayment clause. A prepayment clause in a mortgage provided that acceleration of the debt would trigger the collection of the prepayment premium. The clause was enforceable as liquidated damages even when the prepayment was involuntary and resulted from an acceleration of the debt following default. In re Hidden Lake Limited Partnership, 2000 WL 518201 (Bankr. S.D. Ohio 2000).
- PROPERTY TAXES: Foreclosure. A sale of property seized in a tax foreclosure was void because, although notice of the sale was valid, notice of the initial seizure was not. The court also held that a later purchaser could not raise equitable defenses to support a deed made invalid because of the defective notice, even when the party challenging the notice waited more than two years to bring a claim. Village of Dimsdale v. Grable, 2000 Mich. App. LEXIS 92 (2000).
- SELLER AND BUYER: Negligent misrepresentation. Oregon's home sale disclosure law requires the seller to deliver to the buyer a completed questionnaire stating knowledge of any adverse conditions listed in the form. The law explicitly retained the common law on misrepresentation. In the questionnaire, the seller admittedly misrepresented the condition of the property as free of encroachments. The buyer's negligent misrepresentation claim was properly dismissed because Oregon common law requires a special relationship between parties to support such a claim. A residential home seller has no special relationship with the buyer absent exceptional circumstances. Cameron v. Harshbarger, 998 P.2d 221 (Or. Ct. App. 2000).
- ZONING AND PLANNING: Constructive approval. An ordinance deeming permits constructively approved in the absence of final action within one year did not apply to a denial that lacked the statutorily required reasons in support of the decision. The board not only failed to provide a reason supporting denial but also mistakenly provided a reason supporting approval. Board of Alderman of Newton v. Maniace, 711 N.E.2d 565 (Mass. 1999).
- Agricultural land and animal feeding operations. In Local Regulation of Animal Feeding Operations: Concern, Limits, and Options for Southeastern States, 6 Envtl. Law. 503 (2000), Thomas R. Head III reviews trends in federal, state and local regulation of animal feeding operations and concentrated animal feeding operations in eight southeastern states.
- Agricultural land preservation. In Preserving Farmland, Creating Farms, and Feeding Communities: Opportunities to Link Farmland Protection and Community Food Security, 19 N. Ill. U. L. Rev. 657 (1999), Neil Hamilton suggests that preservation of farmland near urban and suburban areas is important, among other reasons, because it promotes protection of "community food security." He defines community food security as the notion that everyone in a community can obtain a nutritionally adequate diet through local, non-emergency sources.
- Agricultural land and growth management. Edward Thompson Jr. offers a somewhat different rationale for preserving farmland near urban and suburban areas, in "Hybrid" Farmland Protection Programs: A New Paradigm for Growth Management, 23 Wm. & Mary Envtl. L. & Pol'y Rev. 831 (1999). Thompson suggests that a ring of farmland around an urban or suburban area can act as a buffer zone that will contain sprawl within the buffer.
- Conservation easement enforcement. Jessica Jay reviews litigation tactics used by landowners who no longer wish to be constrained by the use limitations of a conservation easement to wear down the will of the land trust to enforce the limitations, in Land Trust Risk Management of Legal Defense and Enforcement of Conservation Easements: Potential Solutions, 6 Envt'l. Law. 441 (2000). Jay advocates the use of insurance and risk sharing pools to provide funding for what she sees as inevitable litigation with future landowners.
- History of real property law. In a three part series entitled Anglo-American Land Law: Diverging Developments from a Shared History, David A. Thomas describes the evolution of American real property law and compares it with English land law. Part I, The Shared History, 34 Real Prop. Prob. Tr. J. 143 (1999); Part II, How Anglo-American Land Law Diverged After American Colonization and Independence, 34 Real Prop. Prob. Tr. J. 295 (1999); Part III, British and American Real Property Law and Practice-A Contemporary Comparison, 34 Real Prop. Prob. Tr. J. 443 (1999).
- Percentage rent clauses in e-commerce. Commercial leases for retail sales operations frequently use a percentage rent clause as a way for the landlord and tenant to share the potential risks and rewards of doing business at the leased premises. Should a landlord still receive a percentage of the gross sales from e-commerce if the location of the leased premises has nothing to do with the volume of sales? Jennifer E. Doty addresses the issue in Comment, The Effects of Electronic Commerce on the Traditional Shopping Center Lease, 6 Tex. Wesleyan L. Rev. 85 (1999).
- Zoning and planning and regulatory takings. In the landmark Lucas decision of 1992, the Supreme Court said that a landowner that is denied all economically beneficial use of its land is entitled to compensation under the fifth amendment of the Constitution, unless the prohibited use was not part of the landowner's rights under the nuisance doctrine or other "background principles of state property law." In Custom and Public Trust: Background Principles of State Property Law?, 30 Envtl. L. Rep. 10003 (2000), David L. Callies concludes that the doctrine of custom and the public trust doctrine provide two background principles that may limit a landowner's sovereignty over its land.
- Arizona extends to lessors existing sellers' immunity from liability to purchasers for failure to disclose psychological impacts to realty. Ariz. Stat. § 32-2156
- Arkansas adopts the Electronic Records and Signatures Act. Digital documents and signatures satisfy any requirements of writing in cases in which parties to the relevant transaction have so agreed. The law also creates a cause of action and remedies for misuse of an electronic signature. 1999 Ark. Acts 718.
- Arkansas adopts the Uniform Statutory Power of Attorney Act. 1999 Ark. Acts 1423.
- Arkansas overhauls procedures relating to foreclosure of mortgages and trust deeds. Ark. Stat. §§ 18-50-101 et seq.
- Arkansas provides for de-annexation. Landowners dissatisfied with the level of services provided by their municipality may make demand for improvement of the services. If that municipality fails to meet the demands, the landowners may cause their property to be detached from the municipality and annexed into a neighboring municipality that does agree to provide such services. 1999 Ark. Acts 779.
- California bars insurers from refusing to renew a homeowner's insurance policy solely because a claim is pending at the time of renewal, except for claims arising from earthquake peril. Cal. Ins. Code § 675.
- California directs the legislative analyst to develop proposals to restructure the state's system for allocating property tax revenues to local entities. 1999 Cal. Stat. ch. 94.
- California subjects escrow transactions conducted through the Internet to the state escrow law. "Internet escrow agents" are subject to licensing requirements and related regulation. Provisions are made for the conduct of escrow transactions through electronic means, including execution of escrow instructions. Cal. Fin. Code §§ 17004.5 et seq.
Keeping Current-Property Editor: Eugene L. Grant, 1211 SW 5th Ave., Ste. 600, Portland,OR 97204-3795, EGrant@schwabe.com. Contributing editors: Robert Flores and Terry Frazier, tFrazier@mc.edu.
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