Keeping CurrentKeeping Current—Property Editor: Prof. James C. Smith, University of Georgia, Athens, GA 30602, jim@uga.edu. Contributing editors: Prof. William G. Baker, Prof. Ronald Benton Brown, Prof. Matthew J. Festa, Prof. Bridget Fuselier, and Prof. Shelby D. Green.

Probate & Property Magazine, November/December 2009, Volume 23, Number 6

Keeping Current | Property

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

CONTRACT RESCISSION: Sellers’ failure to disclose that house was built with logs may justify rescission. In 1999 the sellers bought a log cabin house that had vinyl siding covering the exterior. Before selling the house in 2005 they added sheetrock to the inside walls, so the wooden logs were not visible. The sellers told their broker that the house was built of logs, but neither the broker nor the sellers disclosed that fact to the buyers. The contract provided for the sale of the home “as is” and gave the buyers the right to inspect, but no inspection occurred. After closing, the buyers discovered the home was built of logs and that up to 60% of the logs were damaged or rotting and sought rescission and damages. The buyers conceded that the broker and the sellers were not aware that the logs were defective before the closing. The trial court granted summary judgment in favor of the sellers and their broker. The appellate court upheld the judgment in favor of the broker, concluding that an affidavit from one realtor stating that the broker should have disclosed that the home was constructed of logs was insufficient to establish a claim that the broker had failed to disclose “adverse facts” under the Tennessee Residential Disclosure Act. Tenn. Code Ann. § 66-5-206. The statute defines “adverse facts” as those that would be generally recognized by a competent licensee as significantly reducing the structural integrity or posing a health risk. The appellate court, however, reversed the summary judgment in favor of the sellers, discerning two issues to be addressed on remand. Under the doctrine of fraudulent concealment, the sellers had a duty to disclose material facts affecting the essence of a contract’s subject matter unless the buyers by the exercise of ordinary diligence would have discovered the undisclosed fact. Materiality was a contested issue because the buyers alleged that a reasonable person would attach importance to the log structure of the house in determining whether to purchase. Diligence was a contested issue because the buyers claimed that a reasonable inspection on their part would not have disclosed the log construction. The buyers are fortunate; in many states the sellers would have prevailed on summary judgment because of the “as is” clause and the fact that the sellers did not know that any of the logs were rotten or defective. Odom v. Oliver, No. W2008-01145-COA-R3-CV, 2009 WL 691879 ( Tenn. Ct. App. Mar. 17, 2009).

DEEDS: Bona fide purchaser prevails over owner fraudulently induced into signing quitclaim deed. A mortgage broker fraudulently induced his father-in-law (“the grantor”) into signing a quitclaim deed by representing that it was necessary to verify ownership to obtain pre-approval for a loan on other property the grantor was purchasing. The son-in-law said it would only be used for that purpose. Although the instrument was denominated “Quit-Claim Deed” and contained a notary clause, the grantor asserted that he did not believe that he was conveying the property to his son-in-law. Nonetheless, the grantor admitted that he did not read the instrument in its entirety because he trusted his son-in-law. The son-in-law promptly recorded the deed and took out two loans secured by mortgages on the property. After the son-in-law defaulted on the loans, the grantor learned about a pending foreclosure from a newspaper. He sought to enjoin the action and to have the mortgages declared void. The grantor conceded that the mortgagees were bona fide purchasers for value, without notice of the son-in-law’s fraud. The trial court granted summary judgment for the mortgagees. The decision turned on whether the quitclaim deed was void or voidable. A void deed can convey no rights to a bona fide purchaser, but an innocent bona fide purchaser cuts off an outstanding right to rescind a voidable deed. Even though the grantor signed and delivered the deed, there is case law for the proposition that such a deed is void if acquired through fraud in the factum, such as when the fraudster misrepresents the character of the instrument. For such a deed to be void, however, the grantor must be free from negligence in signing it. The court rejected the grantor’s argument that a jury should determine whether he was negligent. The grantor, a man experienced in real estate transactions having purchased property in the past, acknowledged that he had time to read the deed and was not prevented from reading it. The words “Quit-Claim Deed,” printed clearly on top of the document, and the notary clause gave notice of the document’s import. No reasonable person, the court concluded, would have signed the instrument without reading it first. Shappy v. Downcity Capital Partners, Ltd., 973 A.2d 40 (R.I. 2009).

EASEMENTS: Statute giving department of transportation authority to abandon state highway precludes judicial termination of highway easement based on abandonment in action brought by servient owner. In 1959, a landowner deeded a “perpetual easement and right of way for public highway purposes” through a portion of her property to the state. The easement was used for highway purposes for nearly 30 years, when the highway was rerouted so that it did not traverse the easement. Fifteen years later, the new owner of the servient estate sought a declaration that the state department of transportation had abandoned the easement, resulting in its extinguishment by operation of law. An Ohio statute sets forth procedures for the department to abandon all or part of a state highway “upon giving appropriate notice and offering the opportunity for public involvement and comment.” Ohio Rev. Code § 5511.01. The state supreme court ordered dismissal of the complaint, ruling that the statutory procedure for abandoning highways was exclusive. The court justified its statutory interpretation on both broad policy and practical grounds. First, an action for common law abandonment of an easement because of nonuse of a public highway would be tantamount to an adverse possession action or action to quiet title, neither of which is recognized against the state. This rule is meant to relieve the state of the burdensome obligation of having to monitor its property against adverse actions. The court looked to related statutes (one empowering the county commissioners to vacate a township road on petition by an abutting landowner and another preventing the automatic vacation or abandonment of public highways outside a municipal corporation) and concluded that the legislature intended to preclude common law claims for abandonment in those similar contexts. Second, the procedures set out in the statute served to protect the full range of interests at stake—when a common law action would not—by requiring notice to the public, owners of the abutting lands, other public agencies, affected utilities and railroads, and federal agencies, as well as by allowing public involvement in the decision whether to abandon a highway. One dissent accused the majority of improper reliance on the township road statute, which unlike section 5511.01 provided an express mechanism for abutting landowners to petition for vacation. Arguing that the legislature did not intend the department to have exclusive authority over abandonment decisions, the dissent relied on another statute, Ohio Rev. Code § 5303.01, which specifically allows property owners to challenge the state’s interest in their realty. That the plaintiff did not refer to the latter statute in its complaint should have been of no moment in light of the theory of notice pleading, because it plainly gave notice of a claim to quiet title. New 52 Project, Inc. v. Proctor, 907 N.E.2d 305 (Ohio 2009).

HOMESTEAD : Lien on family homestead granted by wife without husband’s signature is invalid even though wife held title in her own name. A wife bought a residence in her name after she and her husband separated, using money from the sale of their prior homestead. Although the husband visited the residence on several occasions, he bought a trailer home in his sole name in another city. Four months later the wife obtained a home improvement loan, secured by a mechanic’s lien. The next year she defaulted in making payments, and the couple divorced. The wife never filed a homestead exemption on her property, and the husband filed a homestead exemption on his property only after they divorced. After the lender foreclosed on the wife’s residence, she brought an action for wrongful foreclosure. The court held that the residence was the family homestead when the loan was made, there being no proof of abandonment by the husband. A family homestead does not require that both spouses hold title; a husband may have homestead rights in his wife’s separate property. Likewise, a homestead filing is not necessary to claim a homestead. To fix a lien on a family homestead, both spouses “must execute a written contract setting forth the terms of the agreement.” Tex. Prop. Code Ann. § 53.254(a), (c). Because the husband did not sign the contract, the mechanic’s lien was void and the foreclosure was invalid. The lender argued that the wife lacked standing to challenge the lien on the basis that her husband did not sign the contract, but the court held that the contract was a “void instrument” with no effect on the homestead rights of either spouse. Denmon v. Atlas Leasing, L.L.C. , 285 S.W.3d 591 ( Tex. App. 2009).

PREDATORY LENDING: Licensed real estate broker is not liable for predatory mortgage loan arranged by salesperson. A Marin County home, owned by an 81-year-old woman for almost 20 years, had a value of $930,000 subject to a mortgage debt of $880,000. She tried to refinance but did not succeed, probably because her monthly income was only $1,050. Then she received a call from Moshe, a salesperson employed by Executive Financial Lending, Inc., claiming he could get her a loan at attractive terms. Following his instructions, she obtained the loan. Soon she fell behind on the payments and was threatened with foreclosure. She brought a lawsuit apparently naming as defendants everyone involved in any way with the loan transaction. The gravamen of her claim was that the defendants made the loan to her despite the fact that they knew or should have known she would be unable to make the payments. Her complaint had nine counts, including fraud, deceit, elder abuse, breach of fiduciary duties, unfair business practices, negligence in supervising agents and employees, and violations of the Real Estate Settlement and Procedures Act. In addition to Moshe and Executive Financial Lending, one of the defendants was Spear. Executive Financial Lending had a corporate real estate license, and Spear was the “designated officer/ broker” with the statutory duty to be responsible for the supervision and control of salespersons licensed to the corporation. See Cal. Bus. & Prof. Code § 10159.2. The court granted Spear’s motion to dismiss for failure to state a claim against him. California law does not create a private cause of action for a designated officer/ broker’s failure to adequately supervise salespeople. The broker would have vicarious liability for the torts of a salesperson who acted as the broker’s agent, but the right to control is not enough; the principal must be in actual control. The complaint failed to allege specific facts on which to base a finding that Spear was in control of Moshe or other loan participants. The complaint also provided no allegations of fact from which the court could find that Spear was “a ‘person’ who would be liable under RESPA.” Similarly, the statutory claim of elder abuse failed because the complaint contained no basis for determining that Spear owed a duty of care to the elderly plaintiff. Nevis v. Wells Fargo Bank, No. C 07-02568 MHP, 2009 WL 1458042 (N.D. Cal. May 26, 2009) .

PREMISES LIABILITY: Vendor under installment land contract not liable for death resulting from condition of tree near highway. A 10-year-old boy was killed trying to cross a street on his bicycle when his view of oncoming traffic was obscured by a mature tree that overhung the sidewalk. The tree grew on a residential lot, possession of which was transferred six months earlier under an installment land contract. The child’s mother sued both the vendee and vendor of the land for wrongful death damages. The vendor prevailed on a motion for summary judgment. The court viewed the issue—the vendor’s liability to a third party for harm resulting from the condition of trees on land near a highway—as one of first impression and looked to the Restatement (Second) of Torts § 363(2) (1965), which recognizes such liability for a possessor of land. A possessor is defined as “a person who is in occupation of the land with intent to control it.” Id. § 328E(a). This means that liability arises from actual control over the condition causing the injury. Generally, a vendor under a land sale contract has no liability because he no longer occupies or controls the conditions of the property, notwithstanding that he retains legal title to the land as security. Instead, on signing the contract, the vendee goes into possession and all incidents of ownership pass to him. None of the specific acts or contract rights on the part of vendor proffered by plaintiff—right to consent to changes to the property, maintaining casualty and liability insurance (being the only named insured), and regularly driving past the property so as to notice the tree—established the requisite control in the vendor. Moreover, the conception of the vendee as owner meant that the vendor had no liability under a negligence per se theory, as might arise from violating the city ordinance that required owners to trim trees to avoid obstructions to view. For this purpose the vendee also was the owner. Jackson v. Scheible, 902 N.E.2d 807 (Ind. 2009).

RULE AGAINST PERPETUITIES: Right of first refusal does not violate common law rule against perpetuities. In 1977, a condominium developer granted the condominium association a right of first refusal on land owned by the developer adjacent to the condominium project. In 2002, the developer’s successor sued for a declaration that the right of first refusal violated the rule against perpetuities. Complicating the issue was Florida’s adoption of the Uniform Statutory Rule Against Perpetuities (USRAP) in 1988. Fla. Stat. § 689.225. Under USRAP the association would prevail because, with limited exceptions, USRAP applies only to interests acquired by gift. The court, however, ruled that the Act did not apply retroactively to pre-Act interests. Prospective application is the norm, and the court found no expression of a legislative intent for retroactivity in the Act. Also, giving the Act retroactive application would create an internal inconsistency because the Act permitted judicial reformation of a pre-Act interest only in conformity with the version of the rule against perpetuities in effect when the interest was created. Retroactivity would make that limiting language in the Act surplus. Thus, the court analyzed the right of first refusal under the common law rule against perpetuities. The majority of courts have interpreted the rule to apply to purchase options and rights of first refusal on the theory that when exercised an equitable interest springs out of the grantor and such springing executory interests are within the scope of the rule. The court, however, rejected the majority rule for what it termed “the more modern” approach. A right of first refusal is merely a contract right, and the rule does not apply to contract rights. The policy behind the rule is “to ensure that property is reasonably available for development.” That policy is adequately protected by the rule against unreasonable restraints on alienation. A prior Florida case found that a repurchase option at a fixed-price with no time limit was an unreasonable restraint, but the condominium association’s right of first refusal was valid because it required the association to buy at the market price offered by a third party. Old Port Cove Holdings, Inc., v. Old Port Cove Condo. Ass’n One, Inc., 986 So. 2d 1279 (Fla. 2008).

SALES CONTRACTS: “Attorney approval contingency” clause enables party’s attorney to void executed contract for any reason or no reason . The buyers and the sellers executed a form contract, provided by the broker, for the purchase of the sellers’ house for $505,000. The contract contained a clause that provided, “This contract is contingent upon approval by attorneys for Seller and Purchaser,” with either attorney’s disapproval within three business days making the contract “void.” A few days later, the buyers had second thoughts and instructed their attorney to disapprove the contract. Within the time allowed for the disapproval, the buyers’ attorney did, and the buyers bought another house. The sellers were only able to sell the house several years later for $385,000. The sellers then sued the buyers for the difference in price and prevailed in the lower courts on the argument that the contingency clause implied good faith and that the buyers’ instruction to their attorney to reject the contract was made in bad faith. The court of appeals reversed, refusing to impose a good faith test on the “attorney approval” clause. The court first observed that such clauses are “routinely included in real estate contracts in upstate New York” and that they help to assure that real estate brokers “avoid the unauthorized practice of law.” The court recognized that the implied covenant of good faith and fair dealing “embraces a pledge that ‘neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract.’” By the plain language of the contract, however, “any ‘fruits’ of the contract were contingent on attorney approval,” that is, “no vested rights are created by the contract prior to the expiration of the contingency period.” Apart from its textual analysis of the contract, the court identified several pragmatic and policy reasons for not imposing a good faith requirement, including concerns for “clarity and predictability,” which are “particularly important in the interpretation of contracts.” Quoting from an earlier decision, the court reiterated that “stability and adherence to precedent are generally more important than a better or even a ‘correct’ rule of law.” A good faith test would be “‘entirely dependent on the subjective equitable variations of different Judges and courts instead of the objective, reliable, predictable and relatively definitive rules’ of plain-text contractual language.” A good faith test also would improperly intrude into the relationship between the disapproving attorney and her client if the attorney was called on to relate the reasons given by the client to disapprove. The ruling, nonetheless, was a narrow one, applying only to contract clauses that contain no specific limitations on approval. Parties can protect themselves against bad faith or arbitrary action by drafting express parameters to restrain the power of disapproval. Moran v. Erk, 901 N.E.2d 187 (N.Y. 2008).

STATUTE OF FRAUDS: Seller cannot collect on promissory note signed by only one of two buyers after closing of sale. At closing on the sale of developed land, a seller delivered a quitclaim deed to two buyers in exchange for $375,000 in cash. A short time later, one of the buyers executed a separate promissory note promising to pay an additional $300,000 to the mother of the seller. This second note did not refer to the actual seller, the property at issue, the sales agreement, or to the deed; nor did it mention any consideration provided in exchange for the note. The mother of the seller had no ownership interest in the land. Later the buyers stopped making payment on the second note, and the seller sued for the balance, alleging that the initial $375,000 was only a partial payment and that the buyers had made an additional promise (allegedly memorialized in the note) to pay an additional $300,000 for a total of $675,000 for the land. The court held that the additional note failed for two reasons. First, the note violated the Statute of Frauds because it did not refer to the property in question and was not signed by both buyers. Second, the note lacked consideration. The mother exchanged nothing for the note, nor had the seller given anything because he had conveyed title days before execution of the note. The seller also claimed that the note was a modification of the contract of sale, but the court rejected this claim, pointing out that the contract expressly allowed modification only by a writing signed by all the parties. Han v. Han, 670 S.E.2d 842 (Ga. Ct. App. 2008).

WATER: State’s imposition of a fixed water year did not impermissibly limit local irrigation district’s decreed storage rights. Colorado prescribes a “one-fill rule” for irrigation districts that limits each reservoir to a maximum annual diversion of no more than one total fill of water. The water division engineer refused the North Sterling Irrigation District’s call for a diversion to refill its reservoir based on having reached the “low point” because it administered the one-fill rule according to a fixed water year from November 1 to October 31. The irrigation district sued the state and division water engineers, arguing that the irrigation district had historically had its water storage rights determined by “low-point administration,” which operated on a variable calendar based on the annual requirements of the particular irrigation season. The district argued that state law did not allow the engineers to depart from low-point administration by imposing a fixed water year and that the fixed water year deprives it of the best opportunity to reach its fill before the start of the irrigation season. The Colorado Supreme Court ruled for the engineers that the fixed water year did not impermissibly limit the district’s storage rights. The court stated that the engineers were within their authority in prescribing the fixed water year under their statutory function of administering the irrigation district’s rights under the one-fill rule. The opinion noted that although the fixed water year could not constrict the district’s rights to one fill of its storage capacity, the district’s asserted “low point administration” fill rationale could in fact impermissibly expand the district’s storage rights by providing more than one fill per year. North Sterling Irrigation Dist. v. Simpson, 202 P.3d 1207 (Colo. 2009).

Literature

The Cornell Law Review recently published a special issue entitled “Property and Obligation.” The issue features two articles and a series of responses by leading property scholars. The contributions discuss the question of whether property law should move beyond an economic or individual-rights approach to reflect the social aspects of property.

The special issue begins with a Statement of Progressive Property, 94 Cornell L. Rev . 743 (2009), signed by Profs. Gregory S. Alexander, Eduardo M. Peñalver, Joseph William Singer, and Laura S. Underkuffler. The Statement advocates a more communitarian approach to property. It asserts that the conception of property as individual control over resources is inadequate as a basis for a property law system and must be supplemented by examining the plural human values of property, including human flourishing and freedom. Property law also reflects social relationships and requires consideration of virtue. The Statement calls for property laws that “promote the ability of each person to obtain the material resources necessary for full social and political participation.”

Prof. Alexander’s lead article develops these ideas into a theory of property law based on the social obligations implicated by property. In The Social-Obligation Norm in American Property Law, 94 Cornell L. Rev. 745 (2009) , Alexander offers an alternative to the law-and-economics approach to understanding property. He argues that the predominant focus on economic and individual-rights aspects of property has improperly marginalized the moral and social obligations of property ownership. (This notion builds on Alexander’s 1997 book, Commodity & Propriety: Competing Visions of Property in American Legal Thought, 1776–1970. ) These obligations should be recognized in a normative view of property based on justice. Alexander proposes a robust social-obligation norm for property law to promote “human flourishing.” Property rules that promote human flourishing should allow people to develop the “capabilities” for a well-lived life in society and to make “meaningful choices” among different values in life. Because everyone is entitled to flourish, Alexander writes, every person should also be entitled to the property resources required to develop those capabilities. Providing the necessary access to property is an obligation that falls on society. The practical result of this approach would be a property law system that reflects an obligation to share resources, and in certain cases for the state to compel redistribution of resources to promote human flourishing. Alexander offers examples of areas of property law where the social-obligation norm is already present: eminent domain, nuisance, historic preservation, environmental regulations, and intellectual property law.

The second major article in the “Property and Obligation” special issue also proceeds from the Statement to offer an alternative approach to property. In Land Virtues, 94 Cornell L. Rev. 821 (2009), Prof. Peñalver likewise critiques what he sees as the dominant law-and-economics approach as failing to account for the full range of factors that motivate owners’ decisions about how to use their properties. He addresses Harold Demsetz’s classic article Toward a Theory of Property Rights, 57 Am. Econ. Rev. 347 (1967), as an example of how the economic approach to property focuses almost exclusively on the market value of land, thereby reducing land to a commodity. Peñalver argues for a broader view that uses a moral framework for ordering land use rules. In particular, he applies “virtue ethics,” an analytical approach that traces back to Aristotle that has received increased attention recently in several areas of legal scholarship. Peñalver starts with two claims for distinguishing land from a traditional economic analysis: land’s “complexity” and its “memory.” Land’s complexity arises from its uniqueness and its physical and social diversity, which lead to different patterns of relationships between people. Land’s memory is the fact that changes to the land are relatively permanent compared to other forms of economic activity. Peñalver explores how the issues of gentrification, NIMBYs (“not in my back yard”), and LULUs (“locally undesirable land use”) show that a variety of social and moral issues influence people’s motivations about land use beyond mere market value. He then proceeds to outline the “virtue ethics” approach to land use law. Defining “virtues” as dispositions to engage in behavior that is conducive to human flourishing, he identifies three key virtues relating to land use: industry (efficiency and material wealth), justice (property distribution), and humility (precaution about using land). Peñalver argues that a virtue approach to land use will justify government intervention not just in cases of market failure, but in other areas where legal measures are required to promote these virtues.

Prof. Eric R. Claeys provides the first response to these provocative articles. In Virtue and Rights in American Property Law , 94 Cornell L. Rev. 889 (2009), Claeys cautions against making a “leap out of an economic frying pan into a political-philosophy fire.” Claeys accords significant value to what he terms “virtue-friendly” theories of law, especially as they have long been an influence on the development of Anglo-American property law, but he expresses doubts about using the law actively to promote virtue. Claeys focuses on the inherent tension between promoting virtue and protecting rights. He posits that “property” is itself a concept and a metaphor, one that stands for a liberal political regime organized around individual rights. Using the property law system to promote the concept of virtue is problematic, according to Claeys, because it threatens the role of property law as means of the securing rights.

Prof. Jedediah Purdy asks A Few Questions About the Social-Obligation Norm, 94 Cornell L. Rev. 949 (2009). Purdy is generally sympathetic to Alexander’s thesis and focuses in his response on the question of how the discussion of the social-obligation norm will proceed in the future. His questions concern the scope, justification, and application of the social-obligation norm, and its relationship to personal freedom.

Prof. Henry E. Smith contends that Alexander’s social-obligation norm undermines its means by focusing on ends. In Mind the Gap: The Indirect Relation Between Ends and Means in American Property Law, 94 Cornell L. Rev. 959 (2009), Smith calls Alexander’s theory “another chapter in the long history of legal realism.” Although he agrees that the obligations of property ownership receive too little attention, Smith argues that Alexander’s norm makes the same mistake as the law-and-economics approach by focusing too exclusively on ultimate outcomes. Property, according to Smith, fills the “gap” between means and ends by establishing individual rights to things. These rights provide an important moral function. They not only belong at the “core” of property law, but they also can promote human flourishing.

The final response is from Prof. Katrina M. Wyman. In Should Property Scholars Embrace Virtue Ethics? A Skeptical Comment, 94 Cornell L. Rev. 991 (2009), Wyman usefully alludes to the current economic crisis and compares the calls for abandoning the free-market approach to the economy to Peñalver’s call to supplant the economic paradigm of property with a virtue-centered approach. Wyman first provides a critique of Peñalver’s objections to economic analysis of property law and then proceeds to challenge his proposal to use virtue ethics as a normative guide to forming property rules. She applauds the reintroduction of virtue into the discussion of what property laws should accomplish, but she expresses doubt about the feasibility of virtue as a primary framework.

Prof. Singer contributes a substantial essay, Democratic Estates: Property Law in a Free and Democratic Society, 94 Cornell L. Rev. 1009 (2009) . Singer also alludes to current issues: the role that the family home plays in conceptions of the “American Dream” and also in the mortgage crisis. Singer argues, in agreement with Alexander and Peñalver, that property law shapes social life and therefore should be responsive to social needs in addition to economic efficiency. Singer contrasts libertarian and progressive approaches to property ownership in light of the mortgage crisis and the congressional response, and offers his own theory, the “democratic model” of property law, which focuses on the role of property in a democratic society. Singer states that the social nature of property and externalities leads to obligations as well as rights for property owners. Among property’s “plural” values are the widespread distribution of property and access to ownership. Property law should be constructed to promote just social relationships.

The special issue concludes with a brief reply by Prof. Alexander to the responses of Profs. Smith, Claeys, and Purdy in The Complex Core of Property , 94 Cornell L. Rev . 1063 (2009).

The contributions and exchanges in the Cornell Law Review ’s “Property and Obligation” special issue deal with one of the most compelling problems in property law and practice: the conflict between individual rights and the promotion of the common good through property law. This special issue is a major contribution to property law theory and practice.

Legislation

Connecticut adopts the Time Share Act. This new Act imposes substantial regulation on the registration, development, and sale of time shares. 2009 Conn. Legis. Serv. 156.

Connecticut enacts the Uniform Common Interest Ownership Act (2008). This Act revises and updates the original Uniform Common Interest Ownership Act and provides for the formation, management, and termination of common interest communities. The 2008 version of the Uniform Common Interest Ownership Act has been adopted by at least two states. 2009 Conn. Legis. Serv. 225.

Connecticut modifies its mortgage laws. The law provides for the licensing and regulation of mortgage loan originators. The Act coordinates with the Nationwide Mortgage Licensing System and Registry and the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. 2009 Conn. Legis. Serv. 209.

Delaware limits covenants, restrictions, and conditions that prohibit or unreasonably restrict roof-mounted systems for generating solar energy. The law applies to single family residences and most townhouses. It does not affect conservation easements or historic preservation covenants. 77 Del. Laws 144.

Delaware passes the Delaware Secure and Fair Enforcement for Mortgage Licensing Act of 2009. The Act coordinates with the Nationwide Mortgage Licensing System and Registry and the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. 77 Del. Laws 96.

Florida changes its mortgage laws. The modified law coordinates with the Nationwide Mortgage Licensing System and Registry and the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. 2009 Fla. Laws 241.

Hawaii adopts the Uniform Real Property Electronic Recording Act. The Act authorizes electronic signatures, filing, recording, and storage. Unfortunately for those who would like to see the world of real property recording move into the 21st century, adoption of the Act does not result in electronic recording. Many other barriers, statutory, regulatory, customary, and financial, must be breached before electronic recording becomes the norm in real estate transactions. As noted below, Hawaii has also enacted another law to facilitate electronic deeds. The Uniform Real Property Electronic Recording Act has been adopted by at least 22 states. 2009 Haw. Sess. Laws 102.

Hawaii allows its Bureau of Conveyances to accept electronic deeds. 2009 Haw. Sess. Laws 120.

Louisiana enacts the Louisiana Appraisal Management Company Licensing and Regulation Act. The law requires such companies to obtain licenses from the state and to employ only licensed appraisers. 2009 La. Sess. Law Serv. 502.

Maine adopts the Maine Uniform Power of Attorney Act (2006). The Act makes financial powers of attorney durable by default. The principal must sign the power, which becomes presumptively valid if the signature is acknowledged. Witnesses are not required. Provisions are made for electronic signatures. The Uniform Power of Attorney Act has been adopted by at least four states. 2009 Me. Legis. Serv. 292.

Maine mandates foreclosure mediation. The mediation is designed to minimize the effect on homeowners who default on residential mortgages. 2009 Me. Legis. Serv. 402.

Maine modifies its mortgage laws to meet federal requirements. The Act coordinates with the Nationwide Mortgage Licensing System and Registry and the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. 2009 Me. Legis. Serv. 362.

Massachusetts regulates mortgage originators to comply with federal rules. The Act coordinates with the Nationwide Mortgage Licensing System and Registry and the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. 2009 Mass. Legis. Serv. 44.

Michigan enacts the secondary mortgage loan act. The Act regulates secondary mortgage loans and secondary mortgage brokers, lenders, and servicers. The term “secondary mortgage” means a loan secured by real property with a dwelling that is subject to one or more prior mortgages. 2009 Mich. Legis. Serv. 77 .

Michigan licenses and regulates mortgage loan originators and the business practices of mortgage loan originators. The Act coordinates with the Nationwide Mortgage Licensing System and Registry and the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. 2009 Mich. Legis. Serv. 75.

Nevada enacts provisions for the implementation of the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. The law coordinates with the Nationwide Mortgage Licensing System and Registry and the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. 2009 Nev. Stat. 474.

Nevada establishes minimum terms for management agreements between a community manager and a common interest association. The law contains a lengthy list of requirements designed to prevent overreaching on the part of the community manager. 2009 Nev. Stat. 485.

Nevada requires the purchaser of foreclosed residential property to care for the exterior of the building. At a minimum, the purchaser must care for exterior foliage, prevent trespassers from remaining on the property, limit the growth of mosquito larvae in standing water, and prevent any other condition that creates a public nuisance. 2009 Nev. Stat. 484.

New Hampshire modifies its mortgage law to conform to the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. The Act coordinates with the Nationwide Mortgage Licensing System and Registry and the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. 2009 N.H. Laws 290.

New Hampshire validates conveyances to trusts that do not name the trustees as grantees. Presumptively all trustees are grantees. Subject to the terms of the trust, the trustees can decline to accept the property. 2009 N.H. Laws 180.

New York amends its banking law to conform to the federal law. The amended law coordinates with the Nationwide Mortgage Licensing System and Registry and the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. 2009 N.Y. Laws 123.

North Carolina allows joint tenancies to be created with unequal shares. Traditional common law requires that each joint tenant have an equal undivided share in the property. 2009 N.C. Sess. Laws 268.

North Carolina rewrites its mortgage law to meet the requirements of federal law. The revised law is known as the North Carolina Secure and Fair Enforcement (S.A.F.E.) Mortgage Licensing Act and coordinates with the Nationwide Mortgage Licensing System and Registry and the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. 2009 N.C. Sess. Laws 374.

Oregon creates a timetable for the eviction of tenants who reside in a foreclosed dwelling. The purchaser at foreclosure must follow specific notice requirements before evicting a tenant of a dwelling unit. 2009 Or. Laws 510.

Oregon limits the enforceability of transfer fee covenants. Such covenants are void if executed after the effective date of this Act. Consideration payable, whether immediate or remote, to the grantor is exempted even when based on subsequent appreciation of the value of the property. Fees charged by associations (homeowners, condominium, cooperative, mobile home, or property owners) are exempted from the law. 2009 Or. Laws 298.

Rhode Island regulates mortgage originators to comply with federal rules. The Act coordinates with the Nationwide Mortgage Licensing System and Registry and the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. 2009 R.I. Pub. Laws 160.

South Carolina enacts the South Carolina Mortgage Lending Act. The Act coordinates with the Nationwide Mortgage Licensing System and Registry and the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. 2009 S.C. Acts 67.

Tennessee regulates mortgage loan originators. The Act coordinates with the Nationwide Mortgage Licensing System and Registry and the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. 2009 Tenn. Legis. Serv. 499.

Texas adopts the Texas Secure and Fair Enforcement for Mortgage Licensing Act of 2009. The Act coordinates with the Nationwide Mortgage Licensing System and Registry and the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. 2009 Tex. Sess. Law Serv. 1104.

Texas allows a homestead in property held by a qualifying trust. A revocable trust that owns property that the beneficiary can occupy as a residence for a term or life meets the requirements of a qualifying trust. 2009 Tex. Sess. Law Serv. 984.

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