Keeping Current—Property offers a look at selected recent cases, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.
FORECLOSURE: Trial court has continuing jurisdiction after it vacates foreclosure sale to award value of repairs and improvements made by foreclosure purchaser. In 2010, a bank approved a mortgagor’s $900,000 short sale to Warren, but the bank’s law firm failed to cancel the pending foreclosure sale. Griffin purchased the property for $75,000 and made repairs and improvements to the property. Next, the court set aside the foreclosure sale on the grounds of grossly inadequate price and lack of good faith. It turned out that Griffin was Warren’s brother-in-law, and the two acted in cahoots in the bidding. In 2012, the court ordered the return of the foreclosure purchase price to Griffin and reserved jurisdiction to consider Griffin’s motion for reimbursement for his repairs and improvements in the amount of $368,000. Despite numerous hearings, the court never ruled on Griffin’s motion. Instead, in 2017 a rescheduled foreclosure sale took place. At that time, Griffin renewed his motion and the bank objected, arguing that the trial court lacked jurisdiction more than seven years after the final judgment of foreclosure. The appellate court agreed with the bank, but the supreme court reversed. The trial court sits as a court of equity with broad remedial powers. It has post-judgment jurisdiction over matters that arise in various contexts, including the vacating of judicial foreclosure sales. Griffin v. LaSalle Bank, N.A., 2020 Fla. LEXIS 174 (Fl. Feb. 6, 2020).
FORECLOSURE: Foreclosure price is grossly inadequate under equity method that ignores senior mortgage debt. The Hales owned their home for over 21 years and always timely paid their mortgage loan. It was valued at $128,000, with over $60,000 in equity. In 2011, they fell behind on their homeowners’ association (HOA) dues. The HOA filed a lien, followed by a foreclosure complaint seeking the sale of the property to satisfy a claim of $566.41. After filing the complaint, the HOA sent the Hales a new bill for $250 past-due assessments, which the Hales promptly paid, and the HOA’s law firm sent the Hales a notice of lien satisfaction. However, the HOA did not withdraw its suit, proceeding instead to a default judgment of $2,898.67, which included $2,025 in attorney’s fees. Two weeks later the property was sold at a public auction for $3,036. The buyer then moved to evict the Hales, which was the first they heard of the proceedings since paying the HOA. The Hales filed a motion to vacate the sale for gross inadequacy of price. The court denied their motion based on the application of the debt method, which yields a much higher “effective sales price” by including senior debt as part of the price. A split appellate court affirmed. The supreme court reversed, noting that there is no established bright-line rule for what percentage of the sales price must be met for the fair market value to shock the conscience, although sales of less than 10 percent of value are consistently deemed to do so. The court reviewed the debt method for determining the adequacy of price, which adds the price paid to the outstanding senior mortgage to determine the amount the purchaser must incur before gaining a clear title. Applying that method, the effective purchase price was $69,040 or 53.9 percent of the property’s value. The court then reviewed the equity method, which focuses on the equity the purchaser stands to gain and subtracts the outstanding mortgage from the fair market value of the property, comparing the equity to the purchase price. This method resulted in the purchase price being only 4.9 percent of the fair market value, well below the 10 percent threshold, and thus grossly inadequate to the degree that it shocks the conscience. When the buyer takes no steps either to pay off or assume the existing mortgage, while the mortgagor continues to pay the mortgage, the equity method is the only logical option. The court also used the occasion to chastise the HOA and its lawyers for using the foreclosure process as “a proxy to capitalize on a small debt.” Winrose Homeowners Ass’n v. Hale, 837 S.E. 2d 47 (S.C. 2019).
FORECLOSURE: Federal foreclosure bar precludes extinguishment of Fannie Mae mortgage. The Federal National Mortgage Association (Fannie Mae) acquired a home mortgage loan in 2003 and appointed JP Morgan Chase Bank as servicer of the loan. In 2013, a homeowners’ association (HOA) conducted a non-judicial foreclosure sale under a statute granting a “super-priority” lien for up to nine months of unpaid HOA assessments. Chase and Fannie Mae challenged the foreclosure sale and sought to preserve their mortgage. They argued that the Federal Foreclosure Bar, 12 U.S.C. § 4617(j)(3), prevents the HOA’s foreclosure sale from extinguishing Fannie Mae’s beneficial interest in the property. The statute provides: “No property of the Agency [Federal Housing Finance Agency (FHFA)] shall be subject to levy, attachment, foreclosure, or sale without the consent of the Agency. . . .” The district court granted Chase and Fannie Mae’s motion for summary judgment. The foreclosure purchaser appealed, arguing that the Federal Foreclosure Bar does not apply when the FHFA is not a party in the foreclosure action and that Fannie Mae failed to establish an interest in the property because the deed of trust named only the loan servicer, Chase, as beneficiary. The Ninth Circuit Court of Appeals rejected both arguments. The foreclosure bar extends to Fannie Mae because FHFA is the conservator of Fannie Mae. Also, Fannie Mae provided its business records confirming its ownership of the loan and the status of Chase as its loan servicer. That is enough “even if the recorded deed of trust names only the owner’s agent.” Nothing in the state’s recording statutes requires the identification of Fannie Mae as the beneficiary on the publicly-recorded deed of trust to establish its ownership interest in the loan. JP Morgan Chase Bank, N.A. v. 7290 Sheared Cliff Lane Un 102 Trust, 804 Fed. App’x 488 (9th Cir. 2020).
FRAUDULENT CONVEYANCE: Sale of property to purchaser who knows of litigation against the property may be fraudulent conveyance. In 2006, the Knopfs made a loan of several million dollars to enable Sanford to purchase real estate, including a penthouse condominium in New York City. Sanford agreed to execute a mortgage on the property in favor of the Knopfs and promised not to sell or otherwise encumber the property without the Knopfs’ permission. Sanford failed to execute a mortgage or repay the loans. In 2009, the Knopfs sued Sanford for breach of contract. In 2013, while the action was pending, Sanford entered into an agreement to sell the condominium to Phillips, a real estate developer who owned a separate unit in the same building. Before the contract closed, Phillips made a $100,000 loan to Sanford and took a mortgage on the condominium. The sale of the condominium closed in 2016 for $3 million. The Knopfs sued Phillips for tortious interference with contract and Sanford for fraudulent conveyance and breach of fiduciary duty. Eventually, the district court dismissed all the claims. The Second Circuit Court of Appeals reversed on the fraudulent conveyance claim. It first explained that N.Y. Debt. & Cred. Law § 272 encompasses both actual and constructive fraud. A constructively fraudulent conveyance is one made without fair consideration. An actually fraudulent conveyance, on the other hand, is made with actual intent to defraud, regardless of the adequacy of consideration. The bad faith of the transferee is an element of either type. Here, the evidence showed that when Phillips signed the sale contract and made the loan to Sanford, he knew that the state court had restricted the sale of the condominium, and he actively prevented his title company from learning all of the details of the litigation. These facts are sufficient, at the very least, to raise genuine issues of material fact as to whether Phillips acted with actual or constructive knowledge of a fraudulent scheme to deprive the Knopfs of their rights to the condominium or the proceeds of its sale. Knopf v. Phillips, 802 Fed. App’x 639 (2d Cir. 2020).
HOMESTEAD: Homeowner’s late assertion of homestead protection allows recovery of attorney’s fees in action to foreclose mechanic’s lien. In 2013, Jones hired a contractor to waterproof his basement for $6,000, paying 10 percent down. The contractor accidentally drilled into water and sewer lines and advised Jones that a plumber was necessary to repair the breaks before waterproofing could be completed. The contractor billed Jones for the $5,400 balance, which Jones refused to pay. The mechanic’s lien statute allows a prevailing plaintiff to recover reasonable attorney’s fees. Iowa Code § 572.32. After a series of actions to enforce the lien and appeals, in 2017 the trial court entered a judgment for the contractor, including more than $58,000 in attorney’s fees. Two weeks before the foreclosure sale date, Jones for the first time asserted rights under the homestead statute. Id. § 561.21(3). The court agreed that the homestead statute does not permit a mechanic’s lienor to recover attorney’s fees for a judgment against a homestead but ruled that judicial estoppel, waiver, and res judicata barred the homestead protection. The intermediate appellate court reversed, refusing to apply estoppel, waiver, or res judicata. The supreme court, in turn, reversed the appellate court. Resolving an apparent conflict between the mechanic’s lien law and the homestead exemption, it found that the legislature failed to make any special declaration to supersede the homestead exemption as it pertains to attorney’s fees in mechanic’s lien actions against homesteads. Such actions may include interest and taxable costs, but not attorney’s fees. Nonetheless, the court found res judicata and waiver controlled the outcome. The judgment against the home for $4,900 for the lien and $58,953.69 for attorney’s fees had a conclusive and binding effect. Jones could have raised the homestead exemption before the entry of those orders, but not having done so until four years after the enforcement action, the right was lost. Indeed, the court stated, asserting the exemption earlier would have avoided much of the litigation and would have saved the parties and the court system a great deal of time and trouble. Std. Water Control Sys., Inc. v. Jones, 938 N.W.2d 651 (Iowa 2020).
LANDLORD-TENANT: Landlord’s removal of trees and re-grading of part of tenant’s lot breaches covenant of quiet enjoyment. The owner of a manufactured home park sold a manufactured home and leased lot 30 in the park to the buyer under a member occupancy agreement. It was a corner lot, largely covered by trees and vegetation. Several years later, while the tenant was away, the landlord improved an unoccupied adjoining lot, but his improvements extended onto lot 30. The landlord removed vegetation, re-graded, filled the area with truckloads of boulders and dirt, and created a six-foot berm on the east side of lot 30. The lot, which once provided seclusion, now contained a wall of dirt. The tenant demanded that the landlord restore the lot, but the landlord responded that the tenant had no rights on the lot outside of the physical footprint of the manufactured home. The tenant sued for a declaration that he leased the entire lot and for damages. The trial court ruled for the tenant, finding that the landlord had disturbed the tenant’s quiet enjoyment and ordered the landlord to spend up to $10,000 to restore the land. The supreme court affirmed, largely deferring to the findings of the trial court. First, the court agreed that the plain language of the occupancy agreement conveyed rights to the entire lot, beyond the footprint of the manufactured home, and the plan for the lot confirmed this interpretation. Second, deforestation and re-grading substantially interfered with the tenant’s use and enjoyment to constitute a breach of quiet enjoyment. Finally, given the significant disparity in value between the tenant’s monthly rent and the amount the landlord would have to expend to fully remediate the lot, the court agreed with the cap placed on remediation damages. DiMinico v. Centennial Estates Coop., Inc., 2020 N.H. LEXIS 41 (N.H. March 11, 2020).
LANDLORD-TENANT: Tenant may raise habitability and rent escrow defenses as to defects not within period for which rent is sought. After a tenant failed to pay rent for July through November, the landlord brought a summary ejectment action. In the proceeding, the tenant’s counsel attempted to raise the defense of breach of the warranty of habitability, but the trial court refused to accept evidence or hear argument, stating: “[I]f you don’t think [that] it’s habitable[,] I’m not going [to] let her stay in the property.” The tenant’s counsel also asserted a claim for rent escrow, and the trial court responded in the same way and went on to ask: “[S]o this is only for June, July, August, September[,] and October? . . . When you wouldn’t have needed heat. . . . So, you can open your escrow for November [, b]ut they’re not asking for November.” On review, the court of appeals ruled that the trial court’s statements served as a threat of immediate eviction if the tenant pursued the defense of breach of the warranty of habitability, effectively denying her rights under the law. The trial court also mishandled the rent escrow issue, not understanding that it may be raised as a defense in the summary ejectment proceeding, and need not be raised in a separate action. Moreover, the trial court improperly concluded that because the complaint sought rent only for June through October, and because the tenant would not “have needed heat” for those months, a rent escrow issue was not proper. Although the tenant did not need heat for the months for which landlord sought rent, nothing in the rent escrow statute, Md. Code Real Prop. § 8-211(i), sets forth a temporal limitation, that is, that rent escrow claims are allowed only for certain times of the year or under certain conditions. As a remedial statute, it is not narrowly construed. Its purpose is to provide an incentive for landlords to repair serious and dangerous conditions through significant sanctions for those who fail to act. Pettiford v. Next Generation Trust Serv., 226 A.3d 15 (Md. 2020).
LIS PENDENS: Tenant who claims right of first refusal is entitled to lis pendens. A commercial lease gave the tenant a right of first refusal (ROFR) to purchase the property for the five-year term of the lease. The tenant procured a buyer for the property, who signed a purchase agreement with the landlord. As part of that transaction, the landlord and tenant entered into a lease amendment under which the tenant waived its ROFR. This agreement did not close because another tenant asserted a ROFR. The landlord agreed to sell to the other tenant and claimed that the tenant’s ROFR waiver in the lease agreement applied to the pending sale. The tenant disagreed, commenced an action against the landlord, and recorded a lis pendens referencing the action. The complaint sought damages and declaratory relief that the tenant was “entitled to the exercise the first right of refusal” but did not seek specific performance. The landlord and the would-be purchaser sued to remove the lis pendens as a spurious document under Colo. Rev. Stat. § 38-35-201 to -204. The trial court ruled that tenant waived the ROFR and that, even if meritorious, the claim would not affect title to, or the right of possession of, the property. The court of appeals reversed. Colo. Rev. Stat. § 38-35-110(1) authorizes the recording of a lis pendens “[a]fter filing of any pleading” when “relief is claimed affecting the title to real property.” The recording is proper if the claimant shows that the claim “relates to a right of possession, use, or enjoyment of real property.” At the same time, Colo. Rev. Stat. § 38-35-204(1) authorizes an action by any person “whose real . . . property is affected by a recorded or filed . . . document” to petition for the release of a “spurious document.” A “spurious document” includes “any document that is … groundless.” Id. § 38-35-201(3). Although the statute does not define “groundless,” courts interpret it as one to which “the proponent can present no rational argument based on the evidence or the law in support of his or her claim.” A lis pendens is not groundless merely because the underlying claim may fail. In this regard, the trial court erred by conducting a “mini-trial” on the merits of the underlying claim. Instead, whether a lis pendens is groundless turns solely on whether it is filed in connection with a claim that affects title to real property. A right of first refusal is generally regarded as creating an interest in the property and not just contract rights, such that the tenant’s ROFR claim is a proper predicate for a lis pendens. The tenant’s lis pendens was not groundless or spurious. Better Baked, LLC v. GJG Prop., LLC, 2020 Colo. App. LEXIS 654 (Colo. App. Mar. 26, 2020).
QUIET TITLE: Statute of limitations for quiet title actions does not run against owner who is in possession. In 2009, a homebuyer obtained a loan secured by a deed of trust. In 2010 the homeowner defaulted in paying homeowner association (HOA) assessments, and the HOA recorded a notice of default. The lender’s loan servicer requested a breakdown of the delinquent assessments on the property. The HOA’s agent provided that breakdown, which showed $300 in HOA assessments plus other charges and fees. The loan servicer tendered $300 in satisfaction of the delinquent assessments, but the HOA rejected the tender and continued with foreclosure. In 2011, Berberich bought the property for $4,101 at the foreclosure sale. In 2018, nearly six and a half years after the foreclosure sale, Berberich filed a quiet title action against the former owner, the lender, and Mortgage Electronic Registration Systems, Inc. (MERS), seeking a declaration that the HOA foreclosure extinguished the deed of trust and an injunction prohibiting the defendants from attempting to foreclose on the deed of trust. The lender moved to dismiss, arguing Berberich’s complaint was untimely under Nev. Rev. Stat. § 11.080, which sets a five-year period for actions “for the recovery of real property or for the recovery of the possession thereof.” The lender asserted that the limitation period began to run at the foreclosure sale in 2011 and therefore time-barred the complaint. The trial court ruled for the lender, but the supreme court reversed. Because the statute focuses on ownership and possession, it does not bar a property owner who is in possession of the property from bringing a claim to quiet title. But the limitations period does begin to run when a property owner receives notice of disturbed possession. Here, the complaint did not allege facts showing whether or when Berberich received any such notice. Berberich v. Bank of Am., N.A., 460 P.3d 440 (Nev. 2020).
TITLE INSURANCE: Title company has no duty to defend claim clearly outside scope of covered risks. A purchaser of property obtained a homeowner’s title policy. After moving onto the property, he blocked a neighboring property’s access to a road. In response, the neighbor sued to regain access to the roadway. The neighbor maintained that the road was built as part of the Orphaned Roads Program five years earlier and that the insured was aware of the road’s existence and the neighbor’s use at the time of his purchase. The neighbor also asserted a right to use the road based on a prescriptive easement. The insured then filed a demand on the title insurer to defend the action, but the insurer refused on the basis that the claim fell outside the covered risks. The insured sought a declaratory judgment that he was entitled to have the title insurer defend his title or indemnify him in the road litigation. The trial court granted the insurer’s motion to dismiss. The supreme court affirmed. The court explained, even though the duty to defend is broader than the obligation to indemnify, there is no duty to defend because the policy only covers land owned by the insured, which does not include the road. More importantly, the policy expressly excepts from coverage losses from claims that can be ascertained by an inspection of the land or from an accurate survey. After he purchased, the insured obtained a survey showing the road was not on his land. Tritapoe v. Old Republic Nat’l Title Ins. Co., 2020 W. Va. LEXIS 167 (W.Va. March 23, 2020).
LEGAL THEORY. In Second Generation Property Rights Issues, 59 Nat. Res. J. 215 (2019), Prof. Katrina M. Wyman melds law and economics theory with evolving trends in environmental law. She defines “second generation” issues as those arising after the legal system has recognized tradable property rights in environmental resources and posits that modern times call for consideration of the often inefficient and inequitable allocation of tangible benefits. The arguments related to efficiency are formed from a review of the historical expansion of Ronald Coase’s theory to current writings by Eric Posner, Glen Weyl, and others that use marketplace analysis as the foundation for their ultimate conclusions regarding the alleged suboptimal performance of the private property rights economy. Prof. Wyman asserts alternative explanations that recognize law and economics theory without relying on it as the foundation or as the best argument for the current misallocations. Prof. Wyman interestingly seeks to explain why environmental property rights as currently administered fail to promote socially desirable results. From an outsider’s perspective, law and economics are typically found on the opposite end of the spectrum of law and social justice; thus, the second generation concern of distributional failures by those exploiting environmental property rights in a capitalistic fashion is unsurprising. Seeking maximum monetization of each newfound right does not comport with a social justice view of fundamental private property rights policies, like assuring the highest and best use of resources for all. The article specifically reviews three explanations for why an ongoing preoccupation with identifying more environmental property rights is socially undesirable. First, the incompleteness of environmental property rights; second, the transaction costs that complicate trading in the rights; and third, government policies such as subsidies that reduce incentives to trade rights. The article addresses three discernably practical, reference points: western water rights, federal grazing lands, and fisheries, each of which she states largely have stagnated over the last century. Prof. Wyman characterizes the inactivity as a detriment to those seeking to move away from the dominant agricultural use of the water supply to address the increasing demands of urban and environmental users. The incompleteness of environmental property rights argument as a reason for misallocation hinges on a comparison between those rights and the core property right of fee simple. The comparison, though thought-provoking, suffers inevitably from the history associated with each. The fee simple, which took many centuries to develop a core meaning and related rights commonly referred to as sticks in the bundle, is in many ways incomparable to environmental property rights that only emerged in various iterations during the last few decades. The article views the lack of certainty in these areas as characteristic of the incompleteness that chills market transactions and is linked to high transaction costs. The incompleteness has precluded the development of registries, clearinghouses, or similar resources that can provide contextual boundaries for stabilized financial exchanges. Prof. Wyman notes that technological innovation, which is slowly proceeding in some areas such as water rights, might mitigate some of the identified transaction costs. However, she delves further into political hurdles being inextricably intertwined with the undesirable fallout as well. Much like the evolution of the fee simple being in the hands of the few and favored of the past, the current concentration of environmental rights in the hands of traditional property rights holders does not bode well for those such as conservationists seeking a fairer distribution of the rights, or at a minimum, the benefits generated by the rights. Prof. Wyman closes with the observation that only a comprehensive examination of the rights and markets, including their methods of establishment and initial goals, can lead to overcoming the perceived injustice currently associated with the distribution of the rights. Now is the time to undertake such an analysis, as opposed to creating more rights without clarity that allow a proliferation of unfairness and inefficiency in this evolving area of the law.
MORTGAGES. In Empowering the Poor: Turning De Facto Rights Into Collateralized Credit, 95 Notre Dame L. Rev. 1 (2019), Prof. Steven L. Schwarcz, proposes an innovative approach for solving the credit problem as it disproportionately affects the poor who lack record or registered title to their land. This phenomenon exists among 70 percent of the world’s population and is particularly present among rural African American communities in the United States. He proposes the use of de facto property rights, by which he means rights that are recognized and respected in practice, but not formally under official law. Despite their lack of formal evidence, they are nevertheless real rights and defined by norms and customs. Professor Schwarcz believes the use of de facto property rights as collateral to obtain credit is an important step in ending poverty and is economically efficient. By focusing on commercial law, which increasingly recognizes important policy goals and commercial realities as a basis for overriding outmoded limitations otherwise imposed by property law, his proposal appears fair to the vested owner and easy to implement. The need for access to capital, he believes justifies this further exception to the nemo dat rule, not unlike that which justifies the bona fide purchaser rule. In the end, Prof. Schwarcz offers a model law that contains definitions, specifies rights, and provides ways for giving notice of their use.
In Jim Crow Credit, 9 U.C. Irvine L. Rev. 887 (2019), Prof. Mehrsa Baradaran claims that the New Deal created separate and unequal credit markets: non-bank lenders offered high-interest installment loans in black ghettos and banks offered low-cost, securitized, and revolving credit card products in the white suburbs. Lower-risk mortgages in white suburbs led to higher wealth and stability, while in the redlined black ghettos, the economic climate was radically different. Without access to low-cost mortgages or even bank branches, the lenders that filled the gap in the ghetto were loan sharks, high-cost lenders, and contract sellers. For example, by the 1950s, 85 percent of the homes sold to blacks in Chicago were sold on mortgage-mimicking contract sales with exploitative terms. Speculators purchased properties for a few thousand dollars with private capital and then “sold” the home to a black buyer through contracts for three to four times the price of the home. Though national civil rights protests against this inequality led Congress to adopt the Community Reinvestment Act and the Community Development Financial Institution Act, Prof. Baradaran maintains that these responses treated the symptoms, but not the systemic causes of the disparities, which have persisted and most recently revealed themselves in the housing crisis of 2008. The article gives a comprehensive study of the history of mortgage markets and the federal government’s role in creating and regulating them and shows how Washington politics over the years have stood as a barrier to any meaningful reforms. The assessment for the future is not a hopeful one.
DISTRICT OF COLUMBIA adopts COVID-19 Response Emergency Amendment Act. The Act requires servicers of residential and commercial mortgage loans to develop a deferment program for borrowers that, at a minimum, grants a 90-day deferment period of mortgage payments, waives any late fees, and allows the borrower to pay the deferred amount by the shorter of five years from the end of the deferment or the maturity date of the loan if the parties cannot otherwise agree. These benefits extend to the commercial tenants of the borrowers, who notify the landlord of their inability to pay rent as a consequence of the public health emergency. Landlords are required to reduce the rent charged to such tenant during the time in which there is a mortgage deferral in an amount proportionate to the reduced mortgage amount paid by the borrower, for up to 18 months or at the end of the lease term, whichever is earlier. The tenant’s requirement to repay is without interest even if the landlord continues to pay interest on its mortgage loan. D.C. Act 23-286.
KENTUCKY establishes the Kentucky Battlefield Preservation Fund. The fund provides appropriations for Revolutionary War battlefields, Civil War battlefields, and Underground Railroad sites. 2020 Ky. Acts 11.
MAINE authorizes permitting of tiny homes. A tiny home is defined as a living space permanently constructed on a frame or chassis and designed for use as permanent living quarters that does not exceed 400 square feet in size. 2019 Me. Laws 650.
NEW JERSEY authorizes the governor to prohibit evictions of tenants and homeowners during emergencies. In a declared a state of emergency, the governor may issue an executive order stopping evictions of residential tenants and foreclosures of residential properties. The prohibition may last until two months after the emergency declaration has ended. Proceedings to recover possession may be initiated or continued during the time of an executive order, with the enforcement of judgments generally stayed. 2020 N.J. Laws 1.
SOUTH DAKOTA allows real estate brokers to conduct appraisals and property evaluations. The work must comply with prescribed standards. 2020 S.D. HB 1126.
SOUTH DAKOTA adopts the Uniform Power of Attorney Act. The act specifies the manner of execution of the power of attorney; describes the powers conferred, events for termination, and fiduciary duties; and prescribes a statutory form. 2020 S.D. SB 148.
UNITED STATES adopts the Coronavirus Aid, Relief, and Economic Security Act. The act provides emergency financial relief to persons affected by the pandemic, including forbearance of mortgage loan payments for multifamily residential properties with federally-backed loans and a temporary moratorium on eviction of tenants by those mortgagees. 116 P.L. 136, 134 Stat. 281.
VIRGINIA amends partition statute. The provisions require appraisals and open-market sales for partition by sale. 2020 Va. Acts 115.
VIRGINIA adopts new exceptions to seller disclosure obligations. The revised property condition disclosure form states that the owner makes no representations concerning whether pipes are lead-free, the property contains defective drywall, the property is located on or near deposits of marine clays (marumsco soils), and the property is located in an Environmental Protection Agency Map of Radon Zones. The form charges buyers to use due diligence in these areas. 2020 Va. Acts 23; 2020 Va. Acts 24; 2020 Va. Acts 200.
WASHINGTON amends anti-discrimination laws. The amendments add citizenship and immigration status as protected characteristics. 2020 Wash. Ch. 52.
WEST VIRGINIA allows correction of obvious description errors by affidavit. Such errors include transcription errors as to calls for measures and distances in legal descriptions, errors incorporating an incorrectly recorded plat or a deed reference, errors in a lot number or designation, and omitted exhibits supplying the legal description of the real property. Permitted corrections do not include missing or improper signatures or acknowledgments, an incorrect designation of the type of tenancy created, or errors related to a right of survivorship. The form of affidavit is prescribed. Notice must be given to interested parties and title insurance companies are required upon request to issue an endorsement to reflect the corrections made by the corrective affidavit. 2020 W.V. HB 4576.
WEST VIRGINIA adopts new protections for borrowers under junior home mortgage loans. The amendment sets a maximum interest rate of 18 percent on “subordinate mortgage loans”; provides for prepayment without penalty and for a rebate of unearned interest; limits allowable fees and charges; and prohibits specific unfair practices. 2020 W.V. HB 4411.