September 01, 2019 Feature

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

EMINENT DOMAIN: Prejudgment interest is not allowed on attorney’s fees and costs in condemnation award. The Alaska Department of Transportation (DOT) sought to condemn a strip of Keeton’s land and deposited the estimated appraised value of approximately $15,000 with the trial court. Keeton disputed the DOT’s valuation, and a court-appointed master found that the condemned property was worth $24,740. Keeton moved for entry of a final judgment and claimed that prejudgment interest should be calculated on the difference between the deposit and his entire judgment, including significant amounts awarded for attorney’s fees ($47,453) and appraisal costs ($32,276). Alaska Stat.§ 09.55.440(a) provides for 10.5 percent interest “on the amount finally awarded that exceeds the amount paid into court under the declaration of taking.” The trial court’s final award did not include prejudgment interest on the attorneys’ fees and costs. Keeton appealed. The supreme court affirmed, finding the statutory language plain and unambiguous that a final award for purposes of Alaska Stat. § 09.55.440(a) relates only to the value of the property being condemned, improvements on the property, and collateral damage or benefits but not to attorneys’ fees and costs. Keeton v. State, 441 P.3d 933 (Alaska 2019).

FAIR HOUSING ACT: Unequal swimming times for men and women in community pool is discriminatory. Two-thirds of the condominium residents were Orthodox Jews. Following an Orthodox Jewish principle that prohibits men and women to see each other in a state of undress, the condominium association adopted rules that provided for segregated swimming times for men and women in the community pool. Two residents, fined by the association for violating the rules, brought an action to challenge the schedule of swimming times under the Fair Housing Act (FHA), 42 U.S.C.§ 3604(b) and state anti-discrimination laws. The district court granted summary judgment to the association, ruling that there was no discrimination because the “gender-segregated schedule applies to men and women equally.” The Third Circuit Court of Appeals reversed. The FHA applies because the plaintiffs alleged discrimination by limiting the “use of privileges, services, or facilities associated with a dwelling because of…sex.” 24 C.F.R. § 100.65(b)(4). The court went on to hold that whether sex-segregated swimming hours necessarily violated the FHA was beside the point because the schedule adopted was plainly unequal in its allotment of favorable swimming times. Women were allowed to swim only 3.5 hours after 5 p.m. on weeknights, compared to 16.5 hours for men. The schedule also assigned the entire period from 4 p.m. onward on Friday afternoon to men, apparently based on the idea that women would be at home preparing for the Sabbath. On the whole, the schedule left working women with regular hour jobs little access to the pool during the workweek. A concurring opinion would have found segregated swimming times to be per se discriminatory, absent a showing of any recognized exception to the FHA’s anti-discriminatory provisions, such as a policy benefitting the affected class or responding to legitimate safety concerns. Curto v. A Country Place Condo. Ass’n, 921 F.3d 405 (3d Cir. 2019).

FORECLOSURE: Lender holding senior and junior lien on same property may obtain deficiency judgment on junior debt after nonjudicial foreclosure on senior lien. In 2005, the Cobbs borrowed $10 million from Citizens Bank secured by a deed of trust on commercial property. In 2007, the Cobbs borrowed $1.5 million from Citizens Bank secured by a second deed of trust on the same property. Citizens Bank sold both loans to Black Sky Capital, and in 2014 Black Sky exercised its power of sale and foreclosed under the first deed of trust. It acquired the property for $7.5 million. It then filed suit to recover on the note secured by the second deed of trust. The Cobbs and Black Sky moved for summary judgment. The trial court granted the Cobbs’ motion for summary judgment, but the appellate court reversed and remanded. Black Sky appealed. The supreme court began by explaining that the state’s elaborate and interrelated foreclosure and anti-deficiency scheme, Cal. Code Civ. Proc. § 580d, is designed to achieve parity of remedies in judicial and nonjudicial foreclosure. A creditor may choose a judicial foreclosure and seek a deficiency judgment, but the debtor is allowed the right of redemption. If a creditor opts for a nonjudicial foreclosure, a debtor is not allowed redemption, but the creditor cannot recover a deficiency judgment. In determining whether Black Sky could recover a judgment on its junior lien after a nonjudicial foreclosure of its senior lien, the court had to analyze two cases, which read together would preclude the remedy: Rosenleaf Corp. v. Chierighino, 378 P.2d 97 (Cal. 1963) (ruling that § 580d did not bar a junior creditor from recovering on its debt against the same debtor if the junior and foreclosing senior creditors were different), and Simon v. Superior Court, 5 Cal. Rptr. 2d 428 (Ct. App. 1992) (holding that § 580d barred recovery when the senior and junior creditors were the same, reasoning that the creation of multiple trust deeds on the same property would circumvent the parity provisions of the statute). The court concluded that the Simon court’s reading of § 580d(a) was flawed. The statute applies when the sale of the property has occurred under “the deed of trust securing the note sued upon” and not under some other deed of trust, even if that other lien is held by the same creditor who has foreclosed on a senior lien on the same property. The court thus disapproved Simon and the line of cases following its rationale. Black Sky Capital, LLC v. Cobb, 439 P.3d 1149 (Cal. 2019).

LANDLORD-TENANT: Purported extension of three-year statute of limitations to 12 years is precluded by anti-waiver law. A one-page cover sheet set forth basic terms for a month-to-month residential lease and included signature lines followed by “(Seal).” In the attached lease covenants, a statute-of-limitations paragraph stated: “This lease is under seal and is subject to the twelve-year limitation period of [Md. Code Cts. & Jud. Proc. §] 5-102.” Eight years later, the landlord filed a complaint against the tenant seeking $4,035.42 as unpaid rent and related costs, interest, and attorney’s fees. The tenant defended by denying liability and by asserting that the landlord’s action was barred by the general three-year period of limitations for civil actions. Md. Code Cts. & Jud. Proc. § 5-101. In response, the landlord asserted that the lease was a contract under seal and that the applicable period of limitations is therefore 12 years. The trial court rejected the tenant’s limitations defense and entered judgment for the landlord in the amount requested. The court of appeals reversed, explaining that since colonial times and through numerous recodifications, the laws of the state require an action on a debt to be commenced within three years of accrual. The only exception to the rule is for “specialties,” including contracts under seal. In an earlier decision, Tipton v. Partner’s Mgt. Co., 773 A.2d 488 (Md. 2001), the court held that a lease agreement does not become a specialty contract merely because it has the word “seal” affixed to it. Although the court stated in dicta that the parties could agree in the body of the lease that it was subject to the 12-year limitation period, it left open the question whether such an agreement is repugnant to the statute prohibiting clauses by which a tenant waives or foregoes any right or remedy provided under law. In this vein, a statute of limitations is considered a right in that it confers the right to be free of litigation. Smith v. Wakefield, LP, 202 A.3d 1240 (Md. 2019).

LANDLORD-TENANT: Hearing officer’s decisions in Section 8 housing disputes are not quasi-judicial for purpose of certiorari law. Gould paid her rent with the assistance of a Section 8 voucher. An annual inspection by the housing authority determined the residence failed to meet quality standards dictated by federal regulations. The authority then notified Gould that it would terminate vouchers to her landlord. Gould sought transfer of her voucher, but her landlord refused to issue a “zero balance letter” certifying she owed nothing for rent or damages. Later the authority notified Gould that her participation in the Section 8 program was terminated and that, pursuant to regulation, she had the opportunity for an informal hearing to contest the agency’s decision. The hearing officer upheld the termination decision. Gould filed a petition for writ of certiorari seeking judicial review, but the superior court granted the authority’s motion to dismiss the petition. The appellate court reversed in a split decision, with the majority finding the hearing officer’s decision quasi-judicial and therefore within the certiorari jurisdiction of the superior court. On further appeal the supreme court noted that government exercise of quasi-judicial power is generally subject to review by writ, but not the exercise of only executive or administrative power. Although making the distinction is a difficult one, a quasi-judicial act is found where three factors are present: (1) all parties are as a matter of right entitled to notice and hearing with opportunity to present evidence; (2) there is a decisional process that is judicial in nature, involving ascertainment of relevant facts and application of preexisting legal standards; and (3) the decision is final, binding, and conclusive of the rights of the parties. Here, the hearing officer’s decision failed the third element because the housing authority was not bound by it but had the ability to self-determine if legal error was present that warranted disregard of the decision, and there was no time limit for the authority to make its decision on whether it was bound by the hearing officer’s findings. Hous. Auth. of City of Augusta v. Gould, 826 S.E. 2d 107 (Ga. 2019).

LANDLORD-TENANT: Waiver of right to seek declaratory judgment does not offend public policy. Two commercial leases with 20-year terms covered 13,000 square feet of property in Brooklyn. The leases began from a standard form, but there were numerous handwritten additions and deletions, initialed by the parties. The leases also contained a 36-paragraph rider, in which “Tenant waive[d] its right to bring a declaratory judgment action with respect to any provision of this Lease or with respect to any notice sent pursuant to the provisions of this Lease . . . [I]t is the intention of the parties hereto that their disputes be adjudicated via summary proceedings.” When the landlord sent notices to tenant of default, threatening termination, the tenant sought a declaratory judgment that it was not in default. The landlord moved for summary judgment, invoking the waiver clause in the leases. The trial court ruled for the landlord, explaining that “absent some violation of law or transgression of strong public policy, the parties to a contract are basically free to make whatever agreement they wish, no matter how unwise it may appear to a third-party.” The court noted that the waiver provision barred only the declaratory judgment action but otherwise did not preclude actions for damages for breach or tortious conduct nor deny other legal redress or defenses. The intermediate appellate court, with one justice dissenting, affirmed. The court of appeals, in a split decision, affirmed. It began by reciting the “familiar and eminently sensible” proposition that when parties set down their agreements in a clear complete document, their writing should be enforced according to its terms. This rule has special import in the context of real property transactions in which commercial certainty is a paramount concern. In the court’s reading, the lease provision could not be clearer and reflected the parties’ intent to preclude precisely the type of suit initiated. Moreover, the clause did not offend any public policy as identified in the constitution or legislation; indeed, quite the contrary. It furthered the “deeply-rooted” policy of freedom of contract, which serves to keep New York State as the preeminent commercial center of the country, if not the world. 159 MP Corp. v. Redbridge Bedford, LLC, 33 N.Y.3d 353 (2019).

LANDLORD-TENANT: Tenants need not follow procedures of rent escrow statute prior to asserting common-law habitability defense. A residential tenant complained of ongoing repair issues, including through correspondence, to the landlord. Five months after receiving notice of code violations from a city inspector, the landlord filed an eviction action for possession and rent. The tenant acknowledged withholding some rent and raised the common-law defense of breach of the covenant of habitability. A housing court referee found in the tenant’s favor, and the landlord sought judicial review, claiming that the tenant was required to follow statutory procedures for rent escrow, including giving written notice to the landlord before asserting a habitability defense. Minn. Stat. § 504B.385. The lower courts rejected the claim. The supreme court affirmed. Noting that covenants of habitability are part of every residential lease in the state, as codified at Minn. Stat. § 504B.161, longstanding precedent establishes a tenant’s common-law right to assert a violation of the covenants as a defense to the obligation to pay rent in an eviction action. Beyond the common law, the legislature enacted the rent-escrow statute, allowing tenants to deposit rent with the court administrator in case of uninhabitable conditions. This statutory procedure does not abrogate the common-law habitability defense but is intended as an alternative remedy. As such, a tenant need not give written notice prior to raising the common-law habitability defense. Otherwise, landlords who choose not to make repairs could evict tenants who are withholding rent simply because the tenant never provided written notice. Moreover, the landlord failed to show any injury from what it called “trial by ambush” by the lack of formal notice. Ellis v. Doe, 924 N.W.2d 258 (Minn. 2019).

TAX FORECLOSURE: Timely payment of most of the required money is substantial compliance for redemption of tax deed. Carlton owned a three-acre tract of land when he fell sick and was unable to pay his bills. He died soon afterwards. Sorrell bought the land at a tax sale for $68,000 and recorded his deed soon thereafter. To redeem a tax deed, the owner must pay the purchase price with interest and additional costs and fees, as determined from public records or based on a requested itemization from the purchaser, within 180 days of the purchaser’s recorded deed. Tex. Tax Code § 34.21. The deadline to redeem was August 27, and the estate administrator notified Sorrell of the intent to redeem on July 31. On August 10, the estate administrator unexpectedly died, and a successor was appointed on August 21. That same day the estate sent $85,000 for redemption along with correspondence requesting immediate notification if any additional money was due. On August 31, Sorrell’s attorney returned the money, contending the proper redemption amount was $99,845.61. The actual amount due was $96,720.61, so the estate had tendered approximately 88 percent of the amount due prior to the deadline. The estate sued for a declaration of redemption, and the trial court found the estate effectively exercised the right through substantial compliance. The supreme court affirmed. On a matter of first impression, it stated that the statute is exceedingly complex and that the courts have favored redemption over forfeiture for more than a century; thus, substantial compliance may satisfy the statute’s demands. Whether a redeemer’s compliance is substantial is a mixed question of fact and law, determined on an ad hoc basis. Given that the estate acted in good faith and tendered all but $11,000, the trial court did not err in finding substantial compliance. Sorrell v. Estate of Carlton, 2019 WL 1967135 (Tex. May 3, 2019).

WATER: Use of groundwater for cooking, cleaning, and drinking in industrial park is not “residential use” sufficient to prevent relinquishment for non-use. Crown West Realty acquired a 100-acre industrial and business park with certificates allowing the withdrawal of stated quantities of groundwater. Crown West used far less water than allowed by its certificates, and it applied to reclassify its rights for the purpose of transferring the unused groundwater resources to the State of Washington water rights trust program. This would prevent relinquishment of the water rights because of non-use but is allowed only if Crown West qualifies as a “municipal water supplier.” A complicated statutory definition includes the oxymoronic phrase, “providing residential use of water for a nonresidential population,” Wash. Rev. Code§ 90.03.015(4), but the meaning of the phrase has serious practical consequence. With no helpful legislative history or illustration of the types of uses that qualify, the appellate court interpreted the term to mean more than “residential-like” purposes for which Crown West contended. Despite the use of water within Crown West’s industrial and business park for cooking, cleaning, drinking, toileting, and supporting a hotel, the appellate court read that the definition to require, at a minimum, such uses that support independent living for weeks if not months—more than overnight stays. The appellate court was also unpersuaded by Crown West’s argument that its water system was integrated with another traditional municipal water system, because it could only show a nominal exchange and no regular delivery of water for municipal uses. The court therefore affirmed the agency’s decision denying Crown West’s application to recharacterize its water use and transfer its unused rights to the state water rights trust program. Crown West Realty, LLC v. Pollution Control Hearings Bd., 435 P.3d 288 (Wash. Ct. App. 2019).

ZONING: Nonconforming use allows remodeling structure to increase number of bedrooms when number of apartments is not increased. Ames 2304 owned property originally built as a single-family home in 1910, which was converted to four one-bedroom apartment units in 1928. The property was grandfathered as a legal nonconforming use when the city adopted zoning in the area permitting only single-family detached residential dwellings. Ames 2304 sought a permit to remodel the interior and increase the number of bedrooms from four to seven, although retaining four apartment units. A zoning enforcement officer denied the permit request on the ground that the remodel constituted a prohibited increase in the intensity of the nonconforming use. The zoning board affirmed the officer’s decision, and Ames 2304 filed a petition for a writ of certiorari. The trial court rejected the petition, but an appellate court found in favor of Ames 2304. On appeal, the supreme court noted that a vested right exists in the continuation of the nonconforming use in the condition existing at the time of the zoning change unless the nonconforming use is abandoned, enlarged, or extended. Agreeing with the appellate court, it concluded that the zoning connects the intensity of a nonconforming use to the number of dwelling units. Because Ames 2304’s proposed remodel would not increase the number of dwelling units in the structure, intensity would not increase. Ames 2304, LLC v. City of Ames Zoning Bd. of Adjustment, 924 N.W. 2d 863 (Iowa 2019).

LITERATURE

EMINENT DOMAIN. The Fifth Amendment of the federal constitution guarantees citizens that their private property shall not be taken by the government for public use without just compensation. The takings clause serves as a check on potentially arbitrary confiscation of privately-owned land by federal authorities. Discussion of takings law has intensified in light of President Trump’s demands for construction of a border wall between the United States and Mexico. Many articles have begun to address the diverse considerations associated with takings law, as it is clear that wall construction implicates thousands of privately-owned parcels of land.

In Cooperative Federalism and Federal Takings After the Trump Administration’s Border Wall Executive Order, 70 Rutgers U. L. Rev. 647 (2018), Prof. Gerald S. Dickinson analyzes the need for cooperative federalism to overcome the practical and constitutional barriers to acquiring land to build a wall along the US-Mexico border. He begins with the question of the effectiveness of President Trump’s first Executive Order, signed in January 2017, which mandated the construction of an international border wall along the southwest border of the United States, in light of Congressional pushback in the proposed Protecting the Property Rights of Border Landowners Act, H.R. 3943, 115th Cong. (2017), aimed to restrict use of federal eminent domain power in furtherance of that wall. The border is almost 2,000 miles long, with nearly 5,000 privately-owned parcels in just the Texas-Mexico portion. If the bill were to pass, the federal government might have to request the legislatures of states bordering Mexico to condemn the land under state law and then purchase the land from the states. Prof. Dickenson posits that large-scale takings for a wall will require cooperation on many governmental levels. He reviews the history of the takings clause and how, over time, state and federal governments have worked together on projects through cooperative federalism. Given the strong contentions in the border area, it could be that the impediments are just too great.

Prof. Dickinson previously addressed the same general topic in Property Musings at the U.S.-Mexico Border, 33 Md. J. Int’l L. 162 (2018). He asserts that unique valuation issues arise and must be resolved before any determination of just compensation. Although standard property devices come to mind, like comparables or replacement cost computations, the article points out the difficulty in applying those approaches to the current problem. There are few properties to compare whole or partial values because no market exists for transfer of land portions abutting the border. The cost approach avoids that dilemma in part but its complex formula still includes variables that will be atypical when applied to portions of border land. Prof. Dickinson highlights Congress’ four-year role in addressing the takings concerns in the acquisition of more than 500,000 acres in creating the Big Cypress reserve. Although quick-take legislation exists as one approach to obstacles created by private ownership of thousands of acres, the congressional approach is offered as instructive on how to maximize efficiency while minimizing unnecessary costs.

Eminent domain attorneys also cull history for predictive insights on takings law on the border in United States-Mexico Border Wall: The Past, The Present and What May Come, 53 Real Prop. Tr. & Est. L. J. 131 (2018). Attorneys Roy R. Brandys, Nicholas P. Laurent, and Blaire A. Knox trace border fencing back to 1990 and survey past legislation that impacts the current state of affairs. The various laws include the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, Pub. L. 104-208, 110 Stat. 3009 (1996), the Secure Fence Act of 2006, Pub. L. 109-367, 120 Stat. 2638 (2006), and the REAL I.D. Act of 2005, Pub. L. 109-13, 119 Stat. 231, 302-23 (2005); the last of these waived legal and environmental constraints from other existing laws that might inhibit construction of barriers allowed up to that time. The authors describe the current total of 654 miles of barriers located in Arizona, California, and Texas as embodying a proverbial hodge-podge of various types of fencing to address potential crossings of animals, people, and vehicles. They provide specific guidance on pleadings required of both sides in standard federal takings cases and the specialized pleadings and standards available to the government in quick-take cases under the Declaration of Taking Act, 40 U.S.C. § 3114. It is not clear from the article when the government might exercise its power under this act, which allows it simply to declare it has title to property, place what it considers just compensation in a court registry, and worry about private owner responses later. Other details addressed in the article include damages that may occur to remaining property, complications from the use of movable gating at certain points, and effects on indigenous species habitats and Native American reservations. Like the other articles, it concludes with the caution that the effort to build the wall engenders eminent domain administration and litigation that will be a multi-billion-dollar government expense, which promises to grow over an indefinite period.

PROPERTY THEORY. In Property’s Edges, 60 B.C.L. Rev. 753 (2019), Profs. David A. Dana and Nadav Shoked urge new thinking about property—away from the traditional assumption that the protections afforded an owner do not vary in intensity across the owned asset—toward one that sees the required protections along a continuum. They maintain that property law already recognizes much weaker ownership rights in the edges of an asset—the areas lying close to the private-property boundary line—than at its core. For example, an owner has a more robust right to exclude others from his home than from the air above it where airplanes might traverse. But, because this doctrinal and normative reality has heretofore gone largely unacknowledged, lawmakers are prone to ignore it, particularly when new technologies or geophysical phenomena introduce new activities into the edges of a property or when advances in science improve society’s grasp of the effects of existing activities there. This leaves unsatisfying resolutions as new challenges materialize at the asset’s edges. To aid decisionmakers, the authors suggest specific “edges solutions,” working with recent conflicts involving waterline lead poisoning, intrusions of airspace by drones, and rights in shorelines in the wake of climate change. Although they admit that more litigation might result from their proposal, benefits would follow from a refocus on concrete harm.

WATER. In How To Make South Dakota Surface Water Drainage Law Hold Water, 63 S.D. L. Rev. 552 (2019), Justin M. Johnson offers a guide for navigating the “treacherous waters of drainage law as it currently exists” and lays out some solutions for a fairer and more efficient regime. He first describes the three theories for managing excess surface water: common enemy, civil law, and reasonable use in urban areas. He explains that while South Dakota long ago rejected the common enemy rule as being without reason, the application of the civil law and reasonable use rules are also fraught with difficulty (e.g., whether the aggrieved party is upstream or downstream, whether a given landowner’s harmful interference with the flow of surface waters is unreasonable) and sometimes produce disparate results. He suggests that South Dakota drainage law is drifting towards a fusion of the reasonable use rule and the civil law. He argues in favor of a single rule, reasonable use, because both the civil law rule and reasonable use rule seek to allow a dominant estate to drain surface water over a servient estate as long as the drainage does not cause unreasonable harm. It should make little difference whether that drainage is accomplished through natural or artificial channels or whether the property is urban or rural. This analysis should prove useful for other states where water is either scarce or too abundant.

ZONING. Long-regarded as the quintessential province of local governments, zoning, if too restrictive, may cause national problems, including undersupplied housing markets jeopardizing housing affordability for working families, increasing income inequality by reducing less-skilled workers’ access to high-wage labor markets, and stifling GDP growth by driving labor migration away from the most productive regions. In The Role of States in Liberalizing Land Use Regulation, 97 N.C. L. Rev. 293 (2019), Prof. Anika Singh Lemar broaches the subject of state interventions in local land use decisions to avert some of these adverse consequences. Traditionally, state and federal interventions supplemented, rather than displaced, local regulatory authority, but she identifies a recent movement in which localist instincts give way to deregulatory state intervention. Prof. Lemar argues that a state’s decision to intervene (procedurally and substantively) often rests on the grounds that local decision-making undermines a state interest. In these interventions, states thus allocate land use authority between state and local government according to which level of government is most competent to exercise that authority. Prof. Lemar argues for these “tailoring requirements” that strip local governments of the ability to enact outright prohibitions on disfavored uses, yet permitting them to regulate discrete perceived harms associated with those uses, which could lead to better accommodation of competing land uses.

In The New State Zoning: Land Use Preemption Amid a Housing Crisis, 60 B.C. L. Rev. 823 (2019), Prof. John Infranca seems in complete agreement with Prof. Lemar. He observes that zoning has effects not only on neighborhoods but also on the lives of people in general. He identifies a new generation of state interventions in local zoning and land use policy, particularly in the realm of housing. These new interventions include measures that preempt local laws regarding rent regulation, mandatory inclusionary zoning, and short-term rentals, that displace local restrictions on housing development, that provide incentives for municipalities to adopt certain forms of zoning, and that mandate that municipalities permit the as-of-right development of accessory dwelling units. The earlier generation of state land use interventions focused on channeling local decisions and in some instances allowed appeals to a state entity from adverse local decisions, but recent laws and proposed measures tend to expressly preempt and displace specific elements of local zoning. Although these substantive differences are important, he argues that the breadth and depth of the housing crisis in communities throughout the country has made housing affordability a salient issue, which has created urgency for states to intervene. Prof. Infranca claims that something new is occurring in the public discourse regarding land use policy and its broader implications—indeed, a not-so-quiet revolution in land use regulation justifying bold new forms of state intervention.

LEGISLATION

COLORADO amends landlord-tenant law to define unlawful detainer. A residential tenant is guilty of an unlawful detention when the tenant defaults and holds over without permission ten days after service of a written notice requiring in the alternative the payment of the rent or the possession of the premises. For non-residential tenancies and employer-provided housing only three days’ notice is required. For exempt residential tenancies (single-family homes rented by owners of no more than five such structures), five days’ notice is required. 2019 Colo. HB 1118.

COLORADO adopts Rental Application Fairness Act. The act limits any fees assessed to cover the actual costs of processing the application and precludes the use of any credit history older than seven years. A landlord may not use an arrest record or a criminal conviction occurring more than five years earlier, except in case of a conviction for the manufacture or distribution of methamphetamine or that requires the tenant to register as a sex offender. 2019 Colo. HB 1106.

COLORADO adopts the Revised Uniform Unclaimed Property Act. The act defines what property is liable to forfeiture, including gift cards, traveler’s checks, video game tokens, and credit card points. The act includes presumptions for finding abandonment and prescribes procedures for disposition. 2019 Colo. SB 88.

GEORGIA amends landlord-tenant law to prohibit retaliatory actions by landlord. A landlord may not commence a dispossessory action, reduce services to a residential tenant, or otherwise interfere with the tenant’s rights in retaliation for the tenant’s assertion of rights or remedies, including protections for habitability, life, health, and safety or for participating in tenant organizations to address issues of habitability. Retaliation is a defense to a dispossessory action, and the landlord may be liable for one month’s rent plus $500 and reasonable attorney’s fees in the case of willful violations. 2019 Ga. Laws 311.

GEORGIA amends laws regulating real estate appraisers. The amendments broaden the definition of appraisal management services to include recruiting, selecting, or retaining appraisers; managing the process of having an appraisal performed; and reviewing the work of appraisers. The amendments preclude the licensing of companies denied licensing in another state or that evince a lack of good moral character. The amendments also prescribe the composition and duties of appraisal panels. 2019 Ga. Laws 241.

GEORGIA amends title insurance law to include coverage for personal property. Title insurance is defined as insurance covering real or personal property against loss by encumbrance, defective titles, invalidity, adverse claim to title, or unmarketability of title. 2019 Ga. Laws 279.

INDIANA amends lien law to require lienholder to bring enforcement action. The amendments make void a claim for an interest in property if the claimant, including a mortgagee or lienholder, has not commenced an enforcement action within 30 days after written notice from the property owner to file an action to enforce the claim. 2019 Ind. Acts 196.

KANSAS amends landlord-tenant act to protect victims of domestic violence. Landlords may not refuse to rent to protected persons, evict them, or impose rent liability after they vacate because of domestic violence, sexual assault, human trafficking, or stalking. The protected person is required to provide documentation of that status. 2019 Kan. SB 78.

MARYLAND adopts procedures for in rem tax foreclosure. The proceeding is available for property that is vacant and unsafe, if the total amount of liens for unpaid taxes exceeds the total value of the property. The act prescribes procedures for filing a complaint, giving notice to interested parties, and holding a hearing. A judgment is binding and conclusive regardless of any legal disability of owners. 2019 Md. Laws 276.

MARYLAND adopts commercial receivership act. A court may appoint a receiver before judgment to protect property against waste and after judgment to ensure that a judgment is carried out. The act specifies the powers and duties of receivers in the management and disposition of property. The provisions are supplemented by the principles of law and equity. 2019 Md. Laws 284.

MINNESOTA amends recording act to allow discharge of restrictive covenants related to protected classes. An owner may record a prescribed form to discharge restrictive covenants that purport to restrict uses based on race, religion, creed, or national origin. The recording leaves the instrument with the discharged covenant otherwise enforceable but construed as if no restrictive covenant were contained therein. 2019 Minn. Ch. Law 45.

MONTANA requires real estate brokers and salespersons to maintain professional liability insurance. The failure to maintain continuous professional liability insurance is considered unprofessional conduct, making the person liable to sanction or loss of license. 2019 Mt. Laws 358.

MONTANA amends condominium law to limit the adoption of more onerous conditions. A homeowners association may not enter into, amend, or enforce a covenant, condition, or restriction that imposes more onerous use restrictions than those existing when the owner acquired the real property without the owner’s express written agreement. 2019 Mt. Laws 339.

NEVADA amends recording law to allow an owner to remove unlawful restrictions from recorded instruments. The owner of any real property subject to a restriction or prohibition that is void and unenforceable by operation of law may record a form prescribed by the Real Estate Division of the Department of Business and Industry declaring that such restrictions or prohibitions are removed from the referenced original written instrument. 2019 Nev. Stat. 68.

NEW JERSEY amends common-interest community law to provide for a limited super-priority lien for assessments. Except for municipal liens or liens for federal taxes, the priority is limited to assessments for the six-month period prior to the recording of the lien. 2019 N.J. Laws 68.

NEW JERSEY amends mortgage law to specify a statute of limitations. An action to foreclose a residential mortgage shall not be commenced following the earliest of (i) six years from the original or extended date for making the last payment or the maturity date, (ii) 36 years from the date of recording of a recorded mortgage or the date of execution of an unrecorded mortgage, so long as the mortgage itself does not provide for a period of repayment in excess of 30 years, or (iii) six years from the date on which the debtor defaulted, which default has not been cured. 2019 N.J. Laws 67.

NEW JERSEY amends mortgage law to allow for summary foreclosure in case of vacant or abandoned property. A property is vacant or abandoned if a notice of violation of a municipal building or housing code has been issued or where the property is not occupied and there are physical signs of abandonment such as: overgrown or neglected vegetation; the accumulation of newspapers, debris, hazardous substances or materials on the property; the absence of furnishings, as well as statements from neighbors and delivery persons that the residence is vacant and abandoned; or a written statement issued by any mortgagor expressing the clear intent of all mortgagors to abandon the property. In such cases, a mortgagee is not required to serve the debtor with the notice to cure required by section 6 of the Fair Foreclosure Act. A sheriff must sell the property within 90 days of a writ of execution. 2019 N.J. Laws 72.

NEW JERSEY amends mortgage law to require licensing of residential mortgage lenders, brokers, and originators. The amendments specify licensing requirements for loan originators, including having worked under the supervision of a licensed originator. 2019 N.J. Laws 70.

NEW JERSEY amends foreclosure sale procedures. The amendments prescribe non-exhaustive procedures for the conduct of the sheriff’s sale, including bidding, adjournments, and the form of a deed. 2019 N.J. Laws 71.

NEW MEXICO adopts Forfeiture Act. The act establishes standards and procedures for the disposition of property seized by law enforcement agencies or abandoned by owners. 2019 N.M. Laws 133.

NORTH DAKOTA amends requirements for transfer-on-death deed. To be valid, the instrument must use the phrase “transfer on death deed” or the abbreviation “TOD” in the title. 2019 N.D. HB 1271.

OKLAHOMA authorizes the use of online notarial acts. A notary public’s use of an electronic signature and electronic seal satisfies the requirements to authenticate an official act with an official signature and seal of office. The electronic seal must legibly reproduce the required elements of the notarial seal. 2019 OK Laws 338.

TEXAS amends landlord-tenant law to allow early termination of tenancy based on family violence. A residential tenant may terminate a lease based upon documentation from a licensed health care services provider or a licensed mental health services provider who examined or evaluated the victim or a family advocate who assisted the victim. 2019 Tex. SB 234.

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