Keeping Current—Property offers a look at selected recent cases, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.
Mere failure to object to adverse use does not establish neighborly accommodation to defeat hostility. Kudar and Morgan were neighbors. Not knowing for sure the location of their common boundary, Morgan constructed a dirt driveway to his house in 1990 and later built a garage and a greenhouse and planted a line of spruce trees. By 2002, he had expanded, graveled, and blacktopped the driveway, and, in 2015 or 2016, he built a deck behind the greenhouse. After the neighbor, Kudar, saw Morgan clearing brush, thinking he was tossing it on Kudar’s land, Kudar ordered a survey, which revealed that, some years earlier, a survey marker had been moved and that all of Morgan’s improvements were on Kudar’s property. Kudar refused to sell or give an easement to Morgan over the encroached land and then installed fence posts in the driveway along the newly surveyed property line, which prevented Morgan’s use of the driveway. Morgan sued, seeking a declaratory judgment to quiet title to the disputed land based on adverse possession. The trial court granted summary judgment for Morgan. The supreme court affirmed. At issue was the hostility element. Kudar asserted that Morgan’s possession was by neighborly accommodation, thereby defeating hostility. The court explained that a neighborly accommodation should ordinarily defeat a claim of adverse possession, or else neighbors would fear the loss of title for being kind. Yet, adverse possession disputes between neighbors are different from those involving strangers. There is usually some sort of social relationship or contact between them. This means that accommodation must be established by communication or joint activity, such as a shared driveway or shared maintenance of the roads. Kudar proved only that Morgan had offered to remove the spruce trees if Kudar demanded. Critically, there was no evidence that, before 2016, Kudar objected to Morgan’s use of the property other than to complain about the disposal of “junk” on the Kudar property. Alas, how could he object, if he didn’t know where the boundary was? Nonetheless, the court stated that passive forbearance to continuous, open, and exclusive adverse use for over ten years cannot be the basis for a claim of neighborly accommodation sufficient to defeat a claim of adverse possession. Kudar v. Morgan, 521 P.3d 988 (Wyo. 2022).
Seller of condominium unit has no implied right of action to challenge amount of fees imposed by association for statutory disclosure of information to buyer. The Channons decided to sell their condominium unit. The state condominium statute requires sellers to obtain and disclose to buyers, upon request, specific information related to the unit and the financial condition and operations of the condominium association. 765 Ill. Consol. Stat. § 605/22.1. The Channons entered into a sales contract and requested the disclosures from the association’s agent, Westward Management. Westward provided the information but charged the Channons $245. The Channons filed a class action lawsuit alleging a violation of a statutory provision allowing a condominium association to charge “a reasonable fee covering the direct out-of-pocket cost of providing such information and copying.” Id. § 22.1(c). The trial court denied Westward’s motion to dismiss but certified a question to the appellate court. The appellate court held for the Channons, but, on further appeal, the supreme court reversed. The court ruled that because the statute was silent on who could enforce this provision, a private remedy is implied only if the statute would be practically ineffective without the existence of a cause of action and that plaintiffs are members of the class the statute was intended to benefit. Looking to the plain meaning of the statute, the court found the sellers had a duty to disclose but no protection from unreasonable fees. The mandated disclosures were for the sole benefit of potential buyers, ensuring information critical to their purchasing decision is readily available. Any benefit to the sellers is merely incidental. The court’s opinion did not discuss whether sellers could pass the fees on to the buyers. In any case, the fees make the alienation of property more costly, although $245 may not always be a deal breaker. But, if the fees are not expressly passed on to the buyer, it is fair to ponder who else has a legal right to challenge the limits. Channon v. Westward Mgt, Inc., 2022 Ill. LEXIS 877 (Ill. Nov. 28, 2022).
Home purchased by one party in romantic relationship is not jointly owned by the couple. Murphey and Pearson began a romantic relationship in 2009 when Pearson moved into Murphey’s residence, where her two children from a prior relationship also lived. He paid her $500 per month for what he characterized as his contribution to household expenses. In 2012 they had a child of their own and, in the next year, moved to a new home purchased by Murphey. Murphey presented Pearson with monthly expense statements and asked him to pay half of what was listed, which he paid sporadically in full or in part. Pearson claimed to have made significant improvements to the home. In 2020 the relationship ended, and Murphey filed for custody, child support, and shared parenting. Pearson counterclaimed, alleging the parties had an implied contract for joint ownership of the home and unjust enrichment based on his contributions to the mortgage, claiming 50 percent of the accrued equity in the home. The trial court rejected Pearson’s claims. On appeal, the supreme court affirmed, observing that Pearson paid rent while living in the couple’s prior home and did not seek an equity share of that home when it sold. He obtained renter’s insurance in the prior home and did the same in the new home. He declined to sign on as a purchaser of the new home to save his money and credit to further expand his business. He did not have his name placed on the deed, did not participate in the closing, did not assist in obtaining homeowner’s insurance, and did not participate in or contribute funds when she refinanced her mortgage loan. The court also affirmed the denial of Pearson’s claim of unjust enrichment, noting that he had received considerable benefits from the living arrangements over time while Murphey assumed all the financial risks. Murphey v. Pearson, 981 N.W.2d 410 (S.D. 2022).
Condominium formed before enactment of new condominium act may foreclose lien for unpaid assessments by power of sale. In 1982, a declaration created the Executive Office Park Condominium under a North Carolina condominium statute, which was replaced in 1985 by the North Carolina Condominium Act. N.C. Gen. Stat. §§ 47C-1-101 to 4-120. The new act conferred upon condominium associations the right to foreclose liens for unpaid assessments by power of sale. In 2018, Executive filed a claim of lien against three units owned by Rock, asserting delinquency for more than 30 days, which Rock disputed. Subsequently, the clerk of court authorized a power of sale foreclosure, which the trial court affirmed. Rock appealed, and the court of appeals held that Executive lacked the authority to foreclose by power of sale because its 1982 declaration had not been amended to meet the provisions of the new act. Executive appealed, and the supreme court reversed. The court stated the act clearly provides that “unless the declaration expressly provides to the contrary,” power of foreclosure “appl[ies] to all condominiums created … on or before October 1, 1986 . . . with respect to events and circumstances occurring after October 1, 1986.” Id. § 47C-1-102(a). Executive’s declaration did not provide otherwise. It expressly allowed for the foreclosure of liens with no restriction on the process of foreclosure. In re Exec. Office Park of Durham Ass’n, 879 S.E.2d 169 (N.C. 2022).
Transfer of reversionary interest in improvements is subject to transfer taxes. A landowner agreed to sell two adjoining parcels burdened by ground leases for $250 million, apportioned at roughly $50 million for one and $200 million for the other. The leases had a term of 17 years remaining, including renewal options. The ground tenants were subsidiaries of the landowner. The deeds conveyed “in fee simple, all …land described in Schedule 1, …together with all improvements … thereon.” At the same time, the landowner terminated the ground leases. The contract of sale allocated the $250 million purchase price, assigning $76 million to the assessed value of the land for real property tax purposes and the remaining $174 million to “termination of Leasehold Owner’s leasehold title.” The purchaser recorded the deeds and paid a $1.7 million transfer tax calculated on the $76 million land value. Six years later, during a routine audit, the city tax officials determined that the parties to the sale had underpaid transfer taxes because taxes were due on the entire $250 million. It then gave notice of that deficiency and assessed penalties for a total of $11 million. The taxpayers protested, and the matter came before the trial court, which concluded that only the transactions covered by the deeds were taxable events and that the termination of the ground leases with a term of fewer than 30 years was exempt from taxation by statute. D.C. Code §§ 47-901(3) (transfer tax); 42-1101(3)(B) (recordation tax). The court of appeals reversed, explaining that ordinarily in a ground lease when a tenant erects permanent buildings, the landlord’s ownership of the land attaches immediately to the improvements. But some ground leases provide that the improvements are the tenant’s property and that the fee owner can acquire them only if they are left on the property after the lease terminates. The leases here provided that the improvements would be “surrendered to and become the full and absolute property of Lessor at the expiration or earlier termination of the Lease Term.” This departure from the common law placed initial ownership of the buildings on the property with the tenants, with the landowner holding merely a reversionary interest in the buildings. Yet, that reversionary interest had a present value, but the taxpayers did not account for this value in the transfer. The court remanded for a determination of what part of the $174 million ostensibly paid for the termination of the ground leases was, in reality, taxable consideration for the value of the reversionary interests in the buildings on the land rather than for the removal of the ground-lease encumbrances. District of Columbia v. Design Ctr. Owner (D.C.) LLC, 286 A.3d 1010 (D.C. Ct. App. 2022).
Term of lease that exceeds 99 years in violation of statute is void and not voidable. Tufeld owned prime commercial real property in Beverly Hills. In 1960, it rented the property to two tenants at an annual rent of 6 percent of the appraised value, subject to periodic reappraisals, for a term of 98 years ending in 2058. In 1964, the tenants built an office building on the property and later assigned the lease to Emmet, who in turn assigned it to BHG. BHG borrowed to finance the transaction. Planning to renovate the building to make the investment more attractive, BHG sought an extension of the term. In 2003, the parties executed an amendment to the lease to extend the term to December 31, 2123, with a rent increase to 6.5 percent of appraised value. In 2007 and 2009, BHG refinanced its loan, and, in each case, Tufeld signed an estoppel certificate stating the lease term ended in 2123. In 2017, Tufeld learned that leases exceeding 99 years are invalid under a California statute. Cal. Civil Code § 718. In January 2018, Tufeld sued for declaratory judgment and quiet title, seeking to terminate the lease or an order canceling the amendment. BHG filed a cross-complaint, asserting unjust enrichment and seeking reformation and a declaration that the statute did not affect the lease. The trial court found that the assignment in 2003 operated as a novation and reset the term, but it was still subject to the 99-year limit, making the termination date 2102, but those excess years were unenforceable. The court of appeals affirmed. In determining whether a lease that exceeds the statutory maximum is void or merely voidable, the court traced the history of limitations on terms, finding it dates back to 1872, shortly after California became a state. The public policy behind the limitation concerns alienability and flexible use, which are thought to be impaired by long leases. Because public policy is at issue, the statutory limit makes the excess years not merely voidable but void. Given that the central purpose of the lease is to rent the property, however, the court found that the invalid extension beyond 99 years did not taint the entire contract; only that part of the term that exceeds the limit is void. Tufeld Corp. v. Beverly Hills Gateway, L.P., 302 Cal. Rptr. 3d 203 (Ct. App. 2022).
Bankruptcy full-payment plan that pays only arrears on loan cannot discharge mortgage on home. In 2015, Bozeman mortgaged her home to MCS for a $14,000 loan, at 19.7 percent annual interest, payable in nine years. A year later, she filed a petition in bankruptcy, and MCS filed a proof of claim seeking $6,817, the amount in arrears but not including the remaining balance on the mortgage loan. Bozeman submitted a full-payment plan, which did not list the MCS mortgage balance, only the arrearage. MCS did not object to the plan or amend its claim. The bankruptcy court confirmed the plan, and, three years later, the trustee gave notice that Bozeman had completed the plan, indicating that $6,817 reflected the entire debt. MCS objected, claiming that Bozeman still owed $15,000. Bozeman then moved for the release of the lien, and the bankruptcy court discharged Bozeman and terminated the mortgage lien. The district court affirmed, but the Eleventh Circuit reversed. The approved plan violated the anti-modification provision of the Bankruptcy Code, which states, a bankruptcy “plan may . . . modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor’s principal residence.” 11 U.S.C. § 1322(b)(2). No statutory exception removed a full-payment plan from the anti-modification provision, making unlawful the release of MCS’s lien before full repayment of its loan. The court went on to consider whether MCS should be barred from challenging the plan after confirmation by the court. Ordinarily, a confirmation by the bankruptcy court has a preclusive effect, foreclosing re-litigation of any issue actually litigated by the parties and any issue necessarily determined by the confirmation order. Though MCS should have challenged the plan and could have prevented confirmation by timely objection, nevertheless, its lien cannot be deemed satisfied because the anti-modification provision protects MCS’s right to receive a full recovery, and MCS raised a timely challenge to the order releasing its lien. The societal interest in finality did not override the protections of the anti-modification provision. Until MCS is paid in full, its lien remained intact. In re Bozeman, 57 F.4th 895 (11th Cir. 2023).
Covenant establishing right to operate golf course may preclude homeowner’s claim for injury from errant golf balls. Indian Pond developed a subdivision consisting of homes and a golf course. The covenants, recorded in 1999, granted a perpetual easement on golf-course lots for golfers to have “reasonable foot access … to retrieve errant golf balls on unimproved areas of such residential lots.” In 2001, an amendment to the covenants granted easements to the owner of the golf course “for the reasonable and efficient operation of the golf course and its facilities in a customary and usual manner.” In 2014, plaintiffs bought a golf-course lot with a house situated in the immediate path of balls from hole 15, where the design caused golfers to try to cut the corner to stay on the course, but which maneuver sent balls onto the plaintiff’s property. The plaintiffs sued, seeking damages and an injunction for design changes to hole 15. They claimed that, since 2017, more than 650 balls had hit their house. In its jury instructions, the trial court referred only to the first easement for ball retrieval but not the second easement for the operation of the golf course, and the trial court refused to examine attendant circumstances to ascertain the drafter’s intent as to the meaning of “customary and usual” operation. The trial court sustained a jury verdict awarding damages of $100,000 for property damage and $3.4 million for emotional distress. The court also granted injunctive relief, forbidding the operation of the golf course in any manner that allows golf balls to enter the plaintiffs’ property. The supreme judicial court reversed, concluding that the failure to give an instruction addressing the reasonable course operation easement was clearly prejudicial. The court explained that the meaning of an express easement is derived from the presumed intent of the grantor, which is to be ascertained from the words used in the written instrument, construed when necessary in the light of the attendant circumstances. Under the covenants, Indian Pond had reserved the right to operate a golf course, and this meant that if the errant shots that hit the plaintiffs’ home were the result of reasonable golf course operation, they were within Indian Pond’s rights. Any ambiguity in the scope of this provision is to be resolved by the attendant circumstances, but errant golf balls are the natural result of residing next to a golf course. The ball-retrieval easement reinforced this interpretation. Whether the design of hole 15 was inside or outside the range of reasonableness was a question for the jury to decide based on proper instruction from the trial court. This was particularly so, given that the parties had presented conflicting expert testimony on the propriety of the design. Tenczar v. Indian Pond Country Club, Inc., 199 N.E.3d 420 (Mass. 2022).
Unconscionable arbitration provisions in contracts for sale of new homes are not severable, rendering the contracts wholly unenforceable as matter of public policy. Homeowners filed a construction defect suit against their homebuilder and general contractor, Lennar Carolinas, LLC (Lennar). Lennar moved to compel arbitration based on arbitration provisions in the sales contracts. The trial court denied Lennar’s motion based on numerous oppressive terms in the arbitration clauses, rendering the contracts unenforceable. The appellate court reversed, finding the lower court violated a federal doctrine that precludes consideration of unconscionable terms outside an arbitration provision. In Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967), the US Supreme Court explained that under the Federal Arbitration Act (FAA), courts may “consider only issues relating to the making and performance of the agreement to arbitrate,” rather than those affecting the contract as a whole. Id. at 404. The state supreme court reversed. The court agreed (1) that the FAA applied because the transactions involved new housing construction, which manifestly involves interstate commerce based on materials and shipping, and (2) that under Prima Paint and the FAA the validity of an arbitration clause is a separate consideration from the validity of the contract in which it is embedded. Nevertheless, the arbitration provisions in Lennar’s sales contracts, standing alone, contained enough one-sided oppressive language to render the contracts unconscionable and unenforceable. These were contracts of adhesion. That characterization alone did not make them unconscionable, but their substantive terms and the circumstances surrounding contract formation did so. First, based on the contract forms and the parties’ disparate bargaining positions, the claimants lacked a meaningful choice in the negotiation of the arbitration agreement. Further, language throughout the arbitration agreement was particularly egregious. One section gave Lennar sole power to determine what, if any, subcontractors to include in the arbitration. Another limited the usage of any arbitration findings in additional proceedings unless the parties mutually agreed. By these provisions, Lennar maintained the power to decide who appeared and created an additional potentially insurmountable procedural hurdle for claimants beyond the initial arbitration. Unconscionability pervaded the contracts, including the insertion of the arbitration terms in deeds and characterizing them as equitable servitudes. The court refused to sever the arbitration clause and gave two reasons: doing so would require the court to “blue-pencil” the agreement regarding a material term of the contract, a result strongly disfavored in contract disputes and as a matter of policy; severing terms from an unconscionable contract of adhesion would discourage fair, arms-length transactions in the first place. Instead, it would encourage sophisticated parties intentionally to insert unconscionable terms—which often go unchallenged—throughout their contracts, believing that the courts would step in and rescue the party from its gross overreach. The court cautioned that it was not abandoning severability clauses in general, only here where the contract would remain one-sided and be fragmented after severance. Damico v. Lennar Carolinas, LLC, 879 S.E. 2d 746 (S.C. 2022).
Failure to first intervene in tax sale foreclosure by purchaser does not vitiate purchaser’s right to redeem. Calderon owned a condominium unit in North Bergen. After he failed to pay real estate taxes on his unit, the municipality foreclosed its tax lien, and Green Knight Capital, LLC purchased a tax sale certificate for $3,168. After waiting the two years required by N.J. Stat. § 54:5-86(a), in April 2020 Green Knight commenced an action to foreclose Calderon’s statutory right of redemption. In June 2020, Calderon responded to an advertisement circulated by Abreu, an investor apparently seeking to purchase properties in the area. The two soon began negotiating a sale. On August 27, 2020, Abreu’s LLC contracted with Calderon to purchase the unit for $100,000. This transaction, which netted Calderon $63,194, closed on September 22, 2020, and that same day, the closing agent forwarded a $21,612 check to the tax office to redeem the tax sale certificate. Two days after the closing, Green Knight moved in the foreclosure action for the entry of default and for an order setting the time, place, and amount for redemption. A day later, Green Knight learned of the attempt to redeem the tax sale certificate and moved for an order barring the LLC from redeeming. Green Knight also sought the imposition of a constructive trust on the contract between the LLC and Calderon. The LLC filed a cross-motion to intervene in the foreclosure action and for permission to redeem. The chancery judge entered three orders that allowed the LLC to intervene and denied Green Knight’s motions. The judge explained that the record contained nothing to suggest the LLC had unduly influenced Calderon or otherwise acted inequitably or fraudulently. The purchase price was fair and for more than nominal consideration, as required by N.J. Stat. § 54:5-89.1. On appeal, the issue before the supreme court was whether the redemption by the LLC was invalid because the LLC sought to redeem before first moving to intervene in the foreclosure action. The court ruled that it was not. Though the tax sale law does provide that when a property interest is acquired after a foreclosure action is commenced, redemption “shall be made in that cause only,” N.J. Stat. § 54:5-98, here the LLC’s premature attempt to redeem was not fatal. The court pointed out that nothing in the law requires strict compliance with the procedural requirement, only that intervention must be made. Indeed, in recent years, the court has shown greater solicitude for last-minute investments as the means for providing property owners with some degree of relief from foreclosure. These owner-based interests were further enhanced when the legislature recently amended the tax sale law to require that the consideration paid by an investor constitutes fair market value. N.J. Stat. § 54:5-89.1. The court was guided by the fact that the tax sale law is a remedial measure and should therefore be liberally construed, and one of those remedial objects is to protect an owner’s right to recoup some of the value of her property facing tax foreclosure by contracting with an investor like the LLC. A strict rule that bars redemption when an investor fails first to intervene would defeat that purpose. Indeed, the LLC’s misstep puts the tax sale certificate holder in no worse position than it would have possessed had the error not occurred because the chancery judge is still able to oversee the disposition of their competing claims in a manner envisioned by the tax sale law. Green Knight Cap., LLC v. Calderon, 284 A.3d 832 (N.J. 2022).
For more than a century, ranchers have grazed livestock on vast ranges of public land in the western United States, paying very modest fees and subject to few controls over the use of the land. Some 220 million acres of federal land are used for livestock grazing. In Opening the Range: Reforms to Allow Markets for Voluntary Conservation on Federal Grazing Lands, 23 Utah L. Rev. 197 (2023), Shawn Regan, Temple Stoellinger, and Jonathan Wood question the wisdom of this ancient system. They point to worrisome harm to the natural environment and recreational uses. They believe that the existing livestock grazing policies and practices need an overhaul to achieve better management and conservation outcomes. Among the reforms the authors propose are measures to create a marketplace for voluntary conservation, including allowing transfers of unused rights and discounts for implementing conservation measures. They propose two legislative pathways for these reforms: first, to authorize conservation use and second, to allow conservation leasing of federal grazing permits, thus advancing the Biden Administration’s goal to conserve 30 percent of US lands and waters by 2030. They are hopeful that these reforms would promote voluntary, mutually beneficial exchanges between ranchers and environmentalists, two groups that are often in conflict, creating an alternative to costly and time-consuming litigation. In addition, they believe that grazing should be recognized as a formal property right to encourage ranchers to invest in conservation measures and encourage market exchanges that reflect the value of foregone land uses. These ideas seem promising, but we might need first to convince some ranchers, like the Bundys, that the land ultimately belongs to the people.
Religious institutions hold vast amounts of real property, some used in their religious practices and others for mundane purposes. When selling both types of property, religious institutions often impose “religious covenants” that prohibit a wide range of conduct on their former property—from the sale of tobacco to offering reproductive services to wearing “hot pants”—deemed offensive to religious tenets or viewed as bringing discredit, ridicule, or scandal to the religious institution. In Religious Covenants, 74 Fla. L. Rev. 821 (2022), Prof. Nicole Stelle Garnett and Patrick E. Reidy assert that such covenants present many legal and policy questions and raise both private and public law issues. As private law concerns, the covenants may impose unreasonable burdens on land use, and these covenants do not fit neatly within the prevailing scheme of servitudes. When the terms of the covenants are rooted in moral or spiritual commitments, they may seem idiosyncratic and not intuitive to would-be purchasers, making transactions more difficult and costly. At the same time, this inscrutability may make their judicial termination easier on the ground that they tend not to add value to the benefitted land. On the public law side are civil-rights concerns (as purchasers and users may be excluded based on their religious beliefs) and the risks of entanglement by the courts if asked to determine whether a restriction runs afoul of theological terms. In the end, the authors believe that most religious covenants can be enforced, despite the private law concerns about notice and arbitrariness. The authors conclude that although courts have normative and prudential reasons for enforcing the covenants, it does not mean that they are advisable. The authors recommend that religious institutions consider the costs of these control devices, including the likelihood that they result in lower purchase prices, which means fewer resources to support their organizational and charitable missions.
Prof. Karl T. Muth’s article, Apartheid-Era Chicago, 55 UIC L. Rev. 219 (2022), adds noteworthy historical information to the discussion and documentation of racially restrictive covenants from the late nineteenth and early twentieth centuries. The article draws upon well-chronicled archival facts, as well as some exceptional books, covering the early use of restrictive covenants drafted to deny access to housing to a wide range of people from the middle to lowest socio-economic scales, meaning formerly enslaved people, Native Americans, and most immigrants. The article tracks the acquisition of more than 950 acres of Chicago land by Paul Cornell, a man initially characterized as bereft of any finances whose luck turns as a real estate investor. However, Cornell was actually from a wealthy New England family. He practiced law with Stephen A. Douglas while purchasing land en route to becoming one of Chicago’s wealthiest citizens at the time. In hopes of preserving lands and housing standards for those of his ilk, he used racially restrictive covenants throughout his 50-plus years there. These types of covenants can still be found in recording offices throughout the nation, reflecting a measure of irreparable harm done to the country. The covenants exist as a grim reminder of an ugly past, and what some currently desire, namely openly enforced racism in housing for the benefit of segregationist-minded minorities, saddened by their current or impending loss of majority (market driver) status. The article seems particularly timely during these days of unfortunate popular debate over Critical Race Theory, “wokeism,” indoctrination, etc., relative to the actual information that specifically reflects the evolution of society in all of its glorious and inglorious past. Although focused on Chicago and Paul Cornell’s holdings during his time there from 1847 until his death in 1904, there is enough reference material to compare the effects of racially restrictive covenants beyond that city’s boundaries. Thus, the article is to some degree a basic primer on the origins and types of, as well as reasons for, those types of covenants. Racially restrictive covenants were first found in documents from the late 1800s in California and Massachusetts and became pervasive after the Supreme Court ruled them enforceable in Corrigan v. Buckley, 271 U.S. 323 (1926). However, their desired permanent separatist effect was sharply curtailed when the Supreme Court took a different view in Shelley v. Kraemer, 334 U.S. 1 (1948). Prof. Muth’s article mentions seminal cases in Illinois as well as those reaching the Supreme Court but is not a deep dive or broad-ranging treatment of the subject. Prof. Muth, who simply indicates the University of Chicago in his initial footnote, is an Adjunct Assistant Professor of Entrepreneurship there. He holds a law degree and presents as a gifted academic researcher with a keen interest in the history and circumstances of the neighborhood where he resides. Unlike typical law review articles, Prof. Muth’s article cites very few law review articles, none directly addressing racially restrictive covenants, despite at least 10 being published in 2022 alone. Nor does he cite any property treatises or books written by legal academics on the subject. From a social and historical perspective, it is still fascinating to review the development of Prof. Muth’s neighborhood, and this article provides a good introduction for readers with limited knowledge of racially restrictive covenants as pre-civil-rights extensions of the horrors of black codes, Jim Crow laws, redlining, and other atrocities related to housing.
Prof. Emilio R. Longoria, in Right of First Refusal Option Contracts: What They Are, Reoccurring Issues, and Simple Solutions, 62 S. Tex. L. Rev. 1 (2022), offers a short but comprehensive guide through Texas law on Right of First Refusal clauses. These clauses are commonly found in commercial leases. Because they empower the holder with a preferential right to purchase, the way they are drafted determines whether a deal closes quickly, or at all. He goes on to discuss the various scenarios in which these clauses operate to disturb expectations and closings, leading to damages or legal liability. The pitfalls include the failure to know that the property is burdened by the right, the lack of clear termination rules, provisions on waiver, and extensions. Prof. Longoria offers a valuable checklist for drafting to ensure consistency and facilitation of transfers.
Michigan amends recording law to prohibit the recording of documents containing racially restrictive covenants or limitations. The law applies to deeds and other instruments that have a restriction, covenant, or condition, including a right of entry or possibility of reverter, that purports to restrict occupancy or ownership of property on the basis of race, color, religion, sex, familial status, national origin, or other class protected by the federal fair housing act. 2022 Mich. P.A. 234.
Michigan amends its marketable record title act. The amendments provide a list of exceptions for property rights that are not terminated by the operation of the act, some of which are common to many states and some unique to Michigan. The exceptions include succession rights of lessors and lessees after expiration of the lease; interests of mortgagors and mortgages before the obligation has become due and payable (except when no due date is expressed); easements that are observable by physical evidence; easements reserved by a recorded instrument for pipes, valves, roads, cables, flowage, and vegetation management; environmental restrictive covenants that cite state or federal law as their basis; rights in federal and state governments; and oil and gas leases and interests. 2022 Mich. P.A. 235.
New York adopts foreclosure abuse prevention act. The act provides that once an action is pending or after final judgment, no other action may be commenced, including an action to foreclose, without leave of court. The commencement of the new action without leave is a defense in the new action and operates to discontinue the earlier action. If an action to foreclose under the mortgage or to recover under the note is time-barred, any other action to foreclose or recover under the same debt is similarly time-barred. A voluntary discontinuance of a foreclosure will no longer re-set the statute of limitations to bring an action to foreclose, and the action to foreclose is time-barred after six years from the date the loan is first accelerated. The law applies retroactively to any pending foreclosure action filed before December 30, 2022, for which a final judgment and order of sale have not been enforced. 2022 N.Y. Laws 821.
New York creates special proceedings for judgment directing deposit of rents to remedy conditions dangerous to life, health, or safety. The proceeding is available for residential tenants outside the city of New York and certain counties. Either tenants or a housing commissioner may commence a proceeding in cases of lack of heat, running water, light, electricity, adequate sewage disposal facilities, or any other condition dangerous to life, health or safety, which has existed for five days, or an infestation by rodents, or any combination of such conditions. The act also covers conduct by the owner or the owner’s agents of harassment, illegal eviction, continued deprivation of services, or other acts dangerous to life, health or safety. The act authorizes the court to appoint an administrator with the power to order repairs to remedy the conditions. 2022 N.Y. Laws 677.
New York creates special proceedings to convey title to abandoned commercial and industrial real property to a city, town, or village. The provisions apply to commercial or industrial real property where the owner has failed for at least three consecutive months either to collect rent or to institute summary proceedings for nonpayment of rent, and the buildings department finds that the property has become a danger to life, health, or safety as a result of the owner’s failure to assume responsibility for its condition. Such failure may be shown by an owner’s failure to make repairs, supply janitorial services, purchase fuel or other needed supplies, or pay utility bills. 2022 N.Y. Laws 837.
