K eeping 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: Land sale contract. Chapter 11 debtor had paid $40,000 of $198,000 purchase price under a land sale contract and made substantial improvements to the property. Noting that Indiana law treats a land sale contract as a secured transaction, the court held the contract was not an executory contract that debtor could assume only by first curing prepetition defaults. In re Walker, 227 B.R. 870 (S.D. Ind. 1998).
* BROKERS: Commission. A Florida broker not registered in Ohio as a real estate broker when services were performed could not claim a commission on sale of Ohio real estate, nor could the broker recover on theories of promissory estoppel or quantum meruit. Landmark Commercial Realty, Inc. v. Developers Diversified, Ltd., 163 F.3d 389 (6th Cir. 1998), reh'g
denied, No. 97-3602 (6th Cir. 1999).
* BROKERS: Commission. The seller's agent under a nonexclusive listing agreement who had contacted the purchaser four times over a four year period was not entitled to a commission when the record did not show he had procured the purchaser and there was no evidence of bad faith on the part of the seller and the purchaser. Gilmer v. Fauteux, 723 A.2d 1150 (Vt. 1998).
* BROKERS: Liability. A buyer's agent who failed to verify the existence of a warranty that the buyer specifically requested was liable for fiduciary breach; the seller's agent can also be held liable if it assists in the misrepresentation on which the buyer relied. Lee Hawkins Realty, Inc. v. Moss, 724 So. 2d 1116 (Miss. Ct. App. 1998).
* EASEMENTS: Rails to trails. When a railroad abandoned its right of way, the easement was extinguished. Under the Missouri Constitution, the right of way passed to owners of abutting land when there was no evidence that the entire easement was taken from one owner. Thus, the railroad's conveyance to a corporation for use as a hiking trail was ineffective. Boyles v. Missouri Friends of the Wabash Trace Nature Trail, Inc., 981 S.W.2d 644 (Mo. Ct. App. 1998).
* EASEMENTS: Relocation. When an easement across "main driveway" was indefinitely described, the dominant tenant had a right of ingress and egress but not to a particular path. The servient tenant therefore could relocate the easement as long as the relocation would not diminish the dominant tenant's right of ingress and egress. Lewis v. Young, 705 N.E.2d 649 (N.Y. 1998).
* EASEMENTS: Necessity. A conveyance of one of two commonly owned and developed parcels carried with it an implied grant of easement. There was apparent use of the easement, its use was continuous to the extent that intent to convey the easement to the dominant estate existed, and the easement was reasonably necessary for the use and enjoyment of the dominant estate. Houston Bellaire, Ltd. v. TCP LB Portfolio I, L.P., 981 S.W.2d 916 (Tex. App. 1998).
* EMINENT DOMAIN: Right to redeem. When the condemning authority took and paid for more land than it ultimately used, the successor owners were entitled to redeem the surplus property by paying a pro rata share of the price paid by the condemning authority. Kelly v. Thompson, 983 S.W.2d 457 (Ky. 1998).
* LANDLORD AND TENANT: Illegible term. A person who signs a lease agreement with an illegible term is bound by it. The dissenting justice argued that the proper issue was whether there was a meeting of minds on a "no pets" clause because an illegible clause is "no provision at all." Baker v. Deigert, 724 So. 2d 634 (Fla. Dist. Ct. App. 1998).
* LANDLORD AND TENANT: Lessee's negligence; exculpatory clause. A lease did not provide for either the landlord or tenant to carry fire insurance. The landlord's failure to renew the insurance when the lease was extended did not result in a waiver or estoppel of the landlord's fire damage clam based on the tenant's negligence. An exculpatory clause providing for the tenant to preserve the premises "except for reasonable wear and tear and damage by fire or unavoidable
casualty" did not relieve the tenant from liability. Empire Lumber Co. v. Thermal-Dynamic Towers, Inc., 971 P.2d 1119 (Idaho 1998).
* LANDLORD AND TENANT: Undisclosed condition. The Restatement (Second) of Torts on undisclosed dangerous conditions no longer accurately states Oregon law. The tenant's actual or constructive knowledge of a dangerous condition does not, as a matter of law, determine the extent of the landlord's duties to the tenant. The court also held that the Oregon Residential Landlord and Tenant Act, although imposing certain duties on the landlord, does not automatically supplant the common law. Coulter Property Management, Inc. v. James, 970 P.2d 209 (Ore. 1998).
* MORTGAGES: Easements. Because a security deed (a deed to secure a debt, peculiar to Georgia law) was delivered and recorded before an easement was given on the subject property, the easement was extinguished by foreclosure on the security deed. Rhodes v. Anchor Rode Condominium Homeowner's Ass'n, 508 S.E.2d 648 (Ga. 1998)
* MORTGAGES: Right to insurance proceeds. A mortgagee bought a house at a foreclosure sale that resulted in a deficiency judgment against the mortgagors. Then the premises were totally destroyed by fire. As a named insured on mortgagor's homeowner's policy, the mortgagee claimed the insurance proceeds. After noting that, under Hawaii law, a mortgagor has no right of redemption following a foreclosure sale, the court held that the mortgagee was entitled only to
insurance proceeds in the amount of the deficiency. Federal Home Loan Mortgage Corp. v. Transamerica Ins. Co., 969 P.2d 1275 (Haw. 1998).
* MORTGAGES: Priority. A judgment lien was properly recorded against debtors. Later, the debtors purchased real estate and executed a deed of trust as security for the purchase money loan. In holding that the purchase money mortgage was superior to the earlier-filed judgment lien, the court ruled that the sale and execution of the deed of trust were part of a single continuous transaction. Thus, the title that the debtors acquired came encumbered by the purchase money mortgage. Guffey v. Creutzinger, 984 S.W.2d 219 (Tenn. Ct. App. 1998).
* MORTGAGES: Priority. When a residential development's recorded declarations specified that the association's liens would have priority over any mortgage on properties therein, the liens had priority over a later purchase money mortgage. Association of Poinciana Villages v. Avatar Properties, Inc., 724 So. 2d 585 (Fla. Dist. Ct. App. 1998).
* REGULATORY TAKINGS: Permit denial. No taking occurred when a landowner's permit application to build a bulkhead and place fill material was denied, because the property was subject to the restriction in question when the landowner acquired her interest. Wooten v. South Carolina Coastal Council, 510 S.E.2d 716 (S.C. 1999).
* REGULATORY TAKINGS: Subdivision. A landowner's subdivision application was denied because the proposed development would interfere with a planned highway and would result in higher land costs to the city if and when the land was taken. After disposing of ripeness issues, the court held that, under the Texas Constitution, denial of the right to subdivide was a
sufficient present "taking" to require just compensation. City of Houston v. Kolb, 982 S.W.2d 949 (Tex. App. 1999).
* RESTRICTIVE COVENANTS: Laches; tacking. Laches barred the purchaser of a recreational and residential development from enforcing restrictions prohibiting camper trailers, when the former owner had not enforced them for a number of years. In a case of first impression in Missouri, the court ruled that the prior owner's delay could be tacked to the buyer's delay in determining whether enforcement was barred. Porter Perry Marketing Corp. v. Jenneman, 982 S.W.2d 789 (Mo. Ct. App. 1998).
* SELLER AND BUYER: First refusal. The seller had previously granted the plaintiff a right of first refusal in conjunction with the plaintiff's purchase of part of the tract. The seller's transfer of the tract to a partnership in exchange for an interest in the partnership was a "purchase" that triggered the plaintiff's right of first refusal. Tiger, Inc. v. Time Warner Entertainment Co., L.P., 26 F. Supp. 1011 (N.D. Ohio 1998).
* ZONING AND PLANNING: Right-to-farm laws. Under Illinois statute, counties have no authority to impose regulations on the use of land for agricultural purposes. Thus, the county board of zoning appeals had no jurisdiction over large-scale hog raising because the county lacked statutory authority to regulate agricultural users. County of Knox v. Highlands, L.L.C., 705 N.E.2d 128 (Ill. Ct. App. 1998).
* ZONING AND PLANNING: Vested rights. A property owner had building permits to place manufactured houses on his property. Before he could place the homes on his property, the city amended its regulations, providing stricter requirements for manufactured homes to help prevent tornado damage. The court held that the property owner had no vested right to construct the manufactured homes under the old ordinance but must comply with the new rules. Smith v. City of Arkadelphia, 984 S.W.2d 392 (Ark. 1999).
* ZONING AND PLANNING: Vested rights. Plaintiffs sought approval for a shopping center to be constructed on land zoned for "planned business" use. After the plaintiffs had submitted several site plans and environmental impact statements required for the "planned business" zone, the town repealed the "planned business" zone and reinstated a more restrictive business zoning that would not permit large shopping centers. Although acknowledging that the plaintiffs had been "treated shabbily and unfairly," the court held that there was no violation of their substantive due process rights. They had no vested rights in the "business planning" zoning designation when they had not undertaken substantial construction and made substantial
expenditures before the more restrictive zoning was enacted. DLC Management Corp. v. Town of Hyde Park, 163 F.3d 124 (2d Cir. 1998).
* Church property. Kent Greenawalt discusses the Supreme Court's general approach of noninvolvement in issues over church property and the problems associated with the alternative approaches approved by the Court in Hands Off! Civil Court Involvement in Conflicts Over Religious Property, 98 Colum. L. Rev. 1843 (1998).
* Eminent domain: valuation. David Scultz examines issues of valuation and compensation of landowners whose property is acquired through temporary takings in The Price Is Right! Property Valuation for Temporary Takings, 22 Hamline L. Rev. 281 (1998).
* Environmental law. J.B. Ruhl discusses a unified approach to environment, economy and equity in Sustainable Development: A Five-Dimensional Algorithm for Environmental Law, 18 Stan. Envtl. L.J. 31 (1999).
* Environmental law: Indian lands. A recent issue of the South Dakota Law Review contains the following articles concerning environmental problems on Indian lands: Of Surplus Lands and Landfills: The Case of the Yankton Sioux, by Judith V. Royster; Tribal Jurisdiction Over Reservation Water Quality and Quantity, by Jane Marx et al.; and Indian Lands as Critical Habitat for Indian Nations and Endangered Species: Tribal Survival and Sovereignty Come First, by Sandi B. Zellmer. 43 S.D. L. Rev. 283 (1998).
* Landlord and tenant. In Renting in Collegetown, 84 Cornell L. Rev. 543 (1999), Daniel E. Wenner reviews the problems in the "unique rental markets of college towns." He notes the unequal bargaining positions and recommends a model form of lease that would make more equal the relative bargaining of landlords and tenants.
* Landlord and tenant: religion. Michael V. Hernandez argues that "the 'right' of unmarried cohabitants to force themselves and their sexual ethics on objecting religious landlords is as illusory as the emperor's new clothes," in The Right of Religious Landlords to Exclude Unmarried Cohabitants: Debunking the Myth of the Tenant's New Clothes, 47 Neb. L. Rev. 494 (1998).
* Mortgages: nonrecourse loans. In T he Scope of the Borrower's Liability in a Nonrecourse Real Estate Loan, 55 Wash. & Lee L. Rev. 1207 (1998), Gregory M. Stein analyzes nonrecourse real estate loans and proposes a standard to encourage borrowers who are in distress to act as though they were personally liable while still preventing lenders from enjoying a remedy that they agreed to forego.
* Regulatory takings; transferable development rights. In Caught Between Scalia and the Deep Blue Lake: The Takings Clause and Transferable Development Rights Programs, 83 Minn. L. Rev. 815 (1999), Paul Merwin considers whether TDR programs could constitutionally deflect a takings claim that otherwise would succeed under current Supreme Court cases.
* Zoning and planning: policy. In The Search for a National Land Use Policy: For the Cities' Sake, 26 Fordham Urb. L. J. 69 (1998), Shelby D. Green provides a comprehensive survey of federal legislation affecting land use policy. He concludes by advocating the need for more comprehensive federal legislation dealing with land use planning.
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 Pam Hollins at (312) 988-5651.
Keeping Current--Property Editor: Nicholas L. White, School of Law, University of Memphis, Memphis, TN 38152. Contributing editors: Ralph Brashier and Robert Flores.
Probate & Property Magazine is published six times annually and is included in section members' annual dues.