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Probate & Property

Nov/Dec 2023

Keeping Current—Property

Shelby D Green


  • In cases, Bankruptcy discharge does not accelerate balance on note secured by mortgage to start statute of limitations on lender’s foreclosure action.
  • In literature, Life in Common Interest Communities is governed by a variety of rules, often fraught with conflict.
  • In legislation, Texas requires mortgagees to fi le release within 60 days of payoff of loan.
Keeping Current—Property
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Keeping Current—Property offers a look at selected recent cases, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.



Annexation agreement binds purchaser who acquires only part of annexed subdivision. In 2003, the Village of Kirkland and a landowner entered into an annexation agreement, providing that the village would annex 114 acres of land to be developed as a residential subdivision. The recorded agreement was executed under the Illinois Municipal Code sections titled “Annexation Agreements,” 65 Ill. Consol. Stat. §§ 5/11-15.1-1 to 11-15.1-5, the goal being to allow the village to ensure orderly growth and quality of life in a manner that served the best interests of all. In 2017, Kirkland Properties Holding Company acquired title to 34 of the 82 lots in the subdivision subject to the annexation agreement. The village filed suit when Kirkland Properties failed to comply with provisions of the agreement, including completion of the roads. The trial court dismissed the village’s complaint with prejudice because Kirkland Properties had purchased less than the whole of the annexed land and thus was not a successor under the annexation agreement to be bound by its provisions. The appellate court reversed, and the supreme court affirmed, rejecting the assertion that the absence of language in the Municipal Code or annexation agreement expressly stating the agreement is binding on successor owners of the entire parcel or any portion thereof, freed Kirkland Properties of successor liability. Indeed, the opposite reasoning was compelling—nothing in the code states that an annexation agreement is binding only upon successor owners of the entire parcel annexed. The court read the dictionary meaning of “successor” to mean all lot owners who purchased land in the annexed subdivision. Also, the annexation agreement expressly required its provisions to be binding on successors as the subdivision developed in stages. Village of Kirkland v. Kirkland Prop. Holdings Co., 2023 Ill. LEXIS 327 (May 18, 2023).


Bankruptcy discharge does not accelerate balance on note secured by mortgage to start statute of limitations on lender’s foreclosure action. In 2012, a bankruptcy court discharged Silvernagel’s personal liability on his mortgage debt under Chapter 7 of the Bankruptcy Code, see 11 U.S.C. § 727 (2018), but the discharge did not extinguish the mortgage on the debtor’s home. In 2019, US Bank threatened to foreclose on the property if Silvernagel did not make payments. In response, Silvernagel requested declaratory relief to prevent US Bank’s enforcement of the mortgage. He argued that US Bank’s interest was extinguished by the six-year statute of limitations. Alternatively, he asserted that the doctrine of laches prevented enforcement of the agreement. US Bank moved to dismiss, arguing that the loan’s maturity date was in 2036 and that its claim had not accrued, such that the relevant statute of limitations had not commenced. The trial court granted US Bank’s motion and dismissed the case, concluding that the remaining debt was not yet due because US Bank never accelerated payment on the note. The trial court also determined that the doctrine of laches did not apply. Silvernagel appealed, and the intermediate appellate court reversed, holding that the balance of the mortgage became due upon the bankruptcy discharge, at which point the lender’s claim accrued and the statute of limitations began to run. Because six years had passed since the discharge, the court determined that US Bank’s claim had expired. The supreme court reversed. The court explained that an acceleration of the debt requires a “clear, unequivocal” affirmative act by the lender, but all Silvernagel alleged was that the lender “did not commence any action to enforce its rights under the note within six years” of his default. This was not an acceleration, and Silvernagel could not unilaterally accelerate the payments by filing bankruptcy. Nor did the discharge in bankruptcy operate to accelerate the debt. After bankruptcy, a mortgagee’s only recourse is against the property. Although the debtor is no longer personally liable on the note, if the debt is not voluntarily paid, the debtor risks losing the property in foreclosure. US Bank Nat. Ass’n. v. Silvernagel, 528 P.3d 163 (Colo. 2023).


Easement granting “absolute water rights” allows easement holder to grant rights to neighbors to use servient estate. In 1961, Duke Power Company purchased an easement from the Kisers covering 280 acres of largely dry land to create a lake. Duke also purchased an interest in the surrounding lakebed property to construct a dam under a federal license it held to operate a long-term hydroelectric project. Duke later flooded the land, now known as Lake Norman, and the Kisers retained some land, now known as Kiser Island, which they partially subdivided and sold as waterfront lots. Duke later implemented shoreline management guidelines and issued permits to the owners of the waterfront lots to build docks. During a 2015 drought, the lake receded, and Kiser, without permit or permission, built a retaining wall and filled an area covering 2,449 square feet of Duke’s previously submerged easement. Duke sued, alleging trespass and wrongful interference with the easement, seeking the removal of the retaining wall and restoration of the disturbed shoreline. Kiser challenged Duke’s authority to demand the removal of the retaining wall and claimed that Duke had exceeded the scope of the easement by issuing dock permits to third parties and allowing recreational use of the waters. The trial court rejected the defense and ordered the removal of the wall and obstructing material. The appellate court reversed, holding an easement holder cannot permit strangers to the easement to make use of the servient estate, other than for the easement holder’s benefit, without the consent of the servient landowner. The supreme court in turn reversed, noting the easement gave “absolute water rights” to “treat” the servient estate “in any manner deemed necessary or desirable.” The court saw this language as clear and unambiguous, plainly allowing Duke to do what it did. Moreover, the court found this construction consistent with the purpose of Duke’s federal licensing obligations as confirmed by the practice of all affected parties for more than 60 years. Duke Energy Carolinas, LLC v. Kiser, 886 S.E.2d 99 (N.C. 2023).

Eminent Domain

Ordinance merging commonly owned contiguous lots to reduce development and combat beach erosion is not a regulatory taking. Braden’s Folly, LLC owned two contiguous coastal properties on Folly Beach—one beachfront and the other further upland—with a single-family residence on each lot. To restrict accelerated beach erosion, the City of Folly Beach amended an ordinance thereafter requiring certain contiguous lots under common ownership to be merged into single larger lots. The ordinance did not affect the existing use of Braden’s lots, but Braden challenged the ordinance as a taking on the basis that Braden could no longer sell the lots individually. Applying the regulatory takings three-factor test from Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978), the trial court agreed that the ordinance effected an as-applied taking. The supreme court reversed, first highlighting the unique circumstances in Folly Beach where coastline erosion was such an issue that the city received an exemption from the state beachfront management legislation, allowing it to act in the state’s stead in protecting the beach. The city passed various ordinances to slow “super-beachfront” development that was exacerbating beach erosion enough that federally funded beach renourishment was threatened. In applying the Penn Central factors, the court found that economic impact favored the city, agreeing that the ordinance prevented the most profitable use of Braden’s property—the sale of the lots separately—but profitability was recognized as speculative and offset by the fact that there was no physical restriction of the land and that Braden could continue renting out the lots. Regarding Braden’s investment-backed expectations, many factors weighed both favorably and against Braden—significantly, the court found, Braden only half-heartedly attempted to realize its purported investment-backed expectations by placing the lots on the market, all the while the need for regulation in coastal areas had become evident. As it became apparent that the developed lot was the source of the flooding, it became objectively unreasonable for Braden to expect to own the lots with no restrictions or regulations affecting its ownership, including its ability to alienate the property in whatever manner it chose. On the third factor, the character of the government action, the ordinance was a responsible land-use policy enacted as part of a coordinated governmental effort similar to others employed nationwide. Braden’s Folly v. City of Folly Beach, 886 S.E.2d 674 (S.C. 2023).


Mortgagor is not required to prove amount owed in challenge to lender’s affidavit of debt in foreclosure action. A lender sought a judgment of foreclosure against the mortgagor, alleging the principal amount owed to be $417,000. The mortgagor only answered perfunctorily, asserting he owed the lender nothing. The court granted the lender’s motion for summary judgment, and thereafter the lender moved for strict foreclosure and offered in support an affidavit of debt, signed by an authorized signer, attesting that the amount owed was $749,420, including interest and town taxes. The mortgagor objected on the grounds of hearsay and inaccurate calculation of taxes and interest. When the mortgagor failed to offer evidence to support his dispute, the trial court entered judgment for the lender for the amount claimed. The appellate court reversed, and the supreme court affirmed. The Connecticut Rules of Practice provide an exception to the prohibition of hearsay by allowing a lender to prove the amount of debt by submitting an affidavit. Conn. Rules Prac. § 23-18. The supreme court, however, rejected the lender’s argument that to overcome the hearsay exception the mortgagor was required to present evidentiary support for his contention. Instead, the Rules allow proof of a debt by an affidavit stating the amount, along with the note and mortgage, only when no objection is interposed. The mortgagor’s objection concerned the amount of debt, so the hearsay exception under the Rules of Practice did not apply, leaving the burden of proving the amount on the lender. The trial court’s error had the effect of denying the mortgagor the opportunity to cross-examine the lender’s witnesses, including the affiant. JPMorgan Chase Bank v. Malick, 296 A.3d 157 (Conn. 2023).


Tenant who leases city land for music festival has right to ban firearms. The City of Sandpoint leased the War Memorial Field to the Festival, a nonprofit corporation, for a multi-day music festival. The lease required the Festival to ensure adequate security and the safety of patrons and to provide its own general liability insurance to cover any losses or damages to any person from the operation of the music festival, naming the city as an additional insured. The Festival maintained a rule that prohibited attendees from possessing weapons, including firearms, inside the venue. That rule did not comply with state legislation that explicitly preempts cities, counties, and other political subdivisions from adopting or enforcing a rule or regulation that regulates firearm ownership, possession, or carrying. Idaho Code § 18-3302J(2). During an event, two patrons attempted to enter the festival carrying firearms, one held openly and the other carried in a bag. After they were denied entry, the Festival refunded their tickets. Thereafter, they sued seeking a declaratory judgment, alleging violations of their Second Amendment rights and Idaho Code § 18-3302J(2). The trial court denied the claim, and the supreme court affirmed. The court found the gravamen of the case to be whether a private leaseholder (the Festival) can control its leasehold unburdened by the constraints, demands, and limitations that apply to a public property owner (the City). To resolve this question, the court relied on common-law property principles that establish the rights of a tenant. The lease gave the Festival a possessory interest in the War Memorial Field, which included the right to exclude, i.e., the authority to limit where or how others entered the leasehold property and what they brought with them onto the property. Nothing in the applicable statute or case law established that a private lessee of public property enjoys any less or different rights than a private lessee of private property. Moreover, Idaho Code § 18-3302J and the Second Amendment apply only to government actors, which the Festival was not. Herndon v. City of Sandpoint, 531 P.3d 1125 (Idaho 2023).

Lis Pendens

Filing of lis pendens against property not at issue in pending litigation is wrongful. In 2020, Garcia sued Tygier and Rubin in Virginia, alleging that they had violated Virginia’s fraudulent and voluntary conveyance statutes. Va. Code §§ 55.1-400 and 55.1-401. In 2021, Garcia filed a notice of lis pendens in the public land records of the District of Columbia, asserting his entitlement to a lien against “all the estate, real and personal” of Tygier and Rubin, and specifically against their personal residence in the District of Columbia. Tygier and Rubin sued Garcia in the District of Columbia to cancel the lis pendens and to sanction Garcia for the filing under the D.C. civil rules. The lis pendens statute allows the filing of a notice of lis pendens “only if the underlying action or proceeding directly affects the title to or tenancy interest in, or asserts a mortgage, lien, . . . or other ownership interest in real property situated in the District of Columbia.” D.C. Code § 42-1207(b), (j). The trial court denied Garcia’s motion to dismiss the suit and awarded the entire amount of attorney’s fees they sought as a sanction against Garcia. The court of appeals affirmed, with one qualification necessitating a remand to correct the trial court’s order. First, the court ruled that the lis pendens did not meet the requirements of D.C. Code § 42-1207 because Tygier and Rubin’s ownership in their D.C. residence was not directly at issue in the Virginia lawsuit. Though Garcia predicated his right to file the notice on his supposed entitlement under the law of Virginia to a lien against any and all property of appellees, Va. Code §55.1-402, the judge in the Virginia suit informed him that his potential lien would apply only to assets that were transferred improperly to thwart creditors. In fact, Va. Code § 8.01-268, like the D.C. Code, limits a lis pendens to property whose title is at issue in the underlying action. Tygier and Rubin’s family home concededly was not such an asset, and Garcia did not allege or have reason to believe it was. Nothing in Garcia’s Virginia complaint suggested that they fraudulently or improperly transferred funds to acquire, improve, or finance the residence. The complaint did not mention the residence at all. To the contrary, Tygier and Rubin submitted documentary proof, which Garcia did not dispute, that they purchased their residence long before the events giving rise to Garcia’s Virginia complaint. The court of appeals went on to rule that Garcia’s attorney, and not Garcia, was liable for sanctions. The improper filing of the lis pendens was law-related, the wrongfulness of which was “patently clear” with no chance of success. A reasonable pre-filing inquiry should have revealed to the attorney that the laws of both jurisdictions precluded the filing. Garcia v. Tygier, 295 A.3d 594 (D.C. 2023).


Manufacturer and seller of PCBs, known to be hazardous, can be liable in nuisance for harm caused by their release into the environment by purchasers. The state filed public nuisance, trespass, and unjust enrichment claims against Monsanto, seeking the costs of cleanup of polychlorinated biphenyls (PCBs) released into the environment, causing lasting damage to public health and the state’s lands and waters. PCBs are said to be “forever chemicals” and are harmful to all animals, including fish and mammals, and are transported through soil, sediment, air, and water. The trial court dismissed the complaint, reasoning that Delaware does not recognize “product-based” claims, such that Monsanto could not be liable under public nuisance and trespass because it did not exercise control over the PCBs once sold to third parties. On appeal, the supreme court reversed, holding that Delaware law does not require control of the product once sold to be liable for environmental-based public nuisance or trespass claims. Instead, the court adopted a “common-sense” approach and drew upon the Restatement (Second) of Torts §834, cmt. b (1979) to conclude that the test is whether a defendant participated to a substantial extent in carrying out the activity that created the public nuisance or caused the trespass. Here, the state demonstrated that even though Monsanto did not control the PCBs after the sale, it substantially participated in creating a public nuisance and causing the trespass by actively misleading the public that the product was not harmful and continuing to supply PCBs to industry and consumers for decades after internal memoranda revealed their toxic effects and that they would escape into the environment after the sale. State ex rel. Jennings v. Monsanto Co., 299 A.3d 372 (Del. 2023).

USURY: Savings clause on interest in promissory note does not avoid usury violation. Soaring Pine Capital Real Estate and Debt Fund II, a nonbank investment group, loaned Park Street Group Realty Services $1 million to “flip” tax-foreclosed homes in Detroit, i.e., to acquire such homes, renovate them, and then sell them for a profit. The mortgage note for this loan had a stated interest rate of 20 percent, but there were fees and charges associated with the loan that, if considered interest, pushed the effective interest rate above 25 percent. The mortgage note also contained a provision—called a usury savings clause—stating that the note should not be construed to impose an illegal interest rate. After paying more than $140,000 in interest on the loan, Park Street stopped making payments, and Soaring Pine sued. Park Street defended by asserting that Soaring Pine violated the criminal usury statute, Mich. Comp. Laws § 438.41, by knowingly charging an effective interest rate exceeding 25 percent and therefore was barred by the wrongful-conduct rule from recovering on the loan. Soaring Pine countered that the fees and charges associated with the loan were not interest and that the usury savings clause prevented usury. The trial court granted in part and denied in part both parties’ motions, agreeing with Park Street that the fees and expenses tied to the loan were really disguised interest, making the loan criminally usurious, but agreeing with Soaring Pine that although the usury savings clause was enforceable, making the note not facially usurious, Soaring Pine could recover the principal owed but not interest. The intermediate appellate court affirmed. The supreme court reversed. In a thorough examination of the history and policy behind the usury statute, the court found the agreement and the usury savings clause to be contrary to well-defined public policy against excessive interest and the imposition of such rates by lenders to the detriment of borrowers. Enforcing a usury savings clause if the interest provided in the loan agreement is otherwise facially usurious at the time of contracting would defeat this end. Unscrupulous lenders would impose and collect a usurious interest rate, then invoke the savings clause if the borrower later objects, still recovering the maximum interest rate legally permitted—entirely shifting the burden of avoiding usury to the borrower. The court would not defer to a contract bargain, even between sophisticated parties, that clearly offends strong public policy. Soaring Pine Capital Real Estate & Debt Fund II, LLC v. Park Street Grp. Realty Svcs., LLC, 2023 Mich. LEXIS 959 (Mich. June 23, 2023).


Board member who is relative of applicant for rezoning may participate and vote because rezoning is legislative act, which does not require impartial decision-makers. The Whaleys owned property in the Village of Lyndon Station, which was zoned residential although most nearby properties were zoned commercial. They contracted to sell their property subject to the condition that it be rezoned as commercial. They applied for rezoning. Mrs. Whaley’s mother, Jan Miller, lived with the Whaleys and served on both the village board (the local legislative body) and the village plan commission. The plan commission voted to recommend rezoning, and the board voted to approve the rezoning, with Miller participating and voting for approval in both proceedings. During public hearings, a local store owner opposed the rezoning because the Whaleys’ buyer planned to open a competing store. The store owner and other residents also challenged the conflict of interest they deemed present in Miller’s favorably voting for approval of the Whaleys’ application. An administrative agency, the village board of zoning appeals, upheld the village board’s vote to amend the ordinance. The trial court reversed, finding that Miller’s participation violated procedural due process because she was not a fair and impartial decision maker, but the appellate court reversed, finding no due process right to an impartial decision maker when a body like the board engages in legislative action as opposed to adjudicative action. The supreme court affirmed, noting that decisions on what the due process clause requires when the state deprives persons of life, liberty, or property have long recognized a distinction between legislative and adjudicative action. Legislative actions are not entitled to any process beyond the legislative process. Legislators are partial all the time, and the primary check on them acting contrary to public interest is the political process. Because the village board rezoned the Whaleys’ property by amending the village’s generally applicable zoning ordinance, it acted legislatively, and for that reason, the plaintiff was not entitled to an impartial decision-maker. Miller v. Zoning Bd. of Appeals, 991 N.W.2d 380 (Wis. 2023).


Adverse Possession

In Adverse Possession of Art, 46 Colum. J.L. & Arts 1 (2022), Prof. Herbert I. Lazerow questions the application of adverse possession theory to personal property, in particular valuable artwork. The article focuses primarily on California law but gives an overview of the national treatment of the theory. Prof. Lazerow explores the various exceptions that would deny an adverse possessor title, including laches, the discovery rule, tolling, and fraudulent concealment, and in this context discusses some of the recent cases involving Nazi-stolen art. Prof. Lazerow concludes that adverse possession should grant title to the possessor of unregistrable personal property as a theoretical proposition, but the absence of adverse possession would have little practical effect. Few possessors of artwork assert this theory. As the possessor is only concerned about being free of the claimant’s lawsuit, all that seem to matter are the running of the statute of limitations and laches. Prof. Lazerow surmises that possessors cannot be unaware of the possibility of claiming title by adverse possession. The fact that they often do not assert it indicates that it is unimportant to them.

Common Interest Communities

Life in common interest communities is governed by a variety of rules, often fraught with conflict, ranging from what might seem simply matters of aesthetic preference—whether to allow a blue window shutter—to matters of more consequence—whether to assess owners to pay for structural repairs. Yet, in evaluating the enforceability of the rules and decisions by the community, courts apply the same standard of review across all manner of disputes. In Forget the Pink Flamingos: The Mishandling of Common-Interest-Community Conflicts, 74 Ala. L. Rev. 821 (2023), Prof. Nadav Shoked argues that the application of identical, and deferential, analysis to problems with disparate levels of risk and potential harm is wrong-headed. Instead, he suggests a tiered system of judicial review for common-interest-community decisions—those that do not disparately affect a defined interest group within the community should remain subject to permissive review, meaning that aesthetic or lifestyle decisions need not be subjected to substantive review. On the other hand, decisions that distinctly implicate a defined group of owners’ interests should be scrutinized more closely—the substance of these decisions, not just the process of producing them, should be inspected for fairness. Prof. Shoked believes that because the most normatively troubling conflicts of interest within the community are structural, some of the circumstances giving rise to them can be isolated. The article aims systemically to categorize the types of decisions and to establish a principled framework for their treatment. Prof. Shoked starts with a broad description of the common interest form of home ownership and the prevailing approach to conflict resolution, i.e., drawing upon the business judgment rule used in corporation law, which gives almost insurmountable deference to an honest and informed decision made by the board of directors. He shows how that decision-making model may be inapt for common interest communities, given the different missions of the business corporation and a community for living. Prof. Shoked concludes that the common interest community is not merely a product of contractual agreements, but a nexus of interests, including, sadly but inevitably, conflicting interests. Reconciling these propositions requires more nuance and allowances for different types of conflicts.


The toxicity of lead in water has been known for some time, but the removal and replacement of the lead pipes that carry the water into homes has proven a difficult and costly proposition. In Lead and Landlords, 10 Belmont L. Rev. 284 (2023), Prof. Karen Czapanskiy discusses some of the barriers to lead remediation, starting with the technological issues—replacing ancient pipes from the water source, which not counting for costs and political will, is relatively easy to overcome, then focusing on the implementational issues—the private connections to homes, which in the case of rental property, may need a landlord’s consent. But many landlords refuse to give consent, asserting the right to exclude. When a landlord does not replace a line or consent to the replacement of the private connection, tenants continue to be exposed to significant levels of lead contamination from the pipes, and most of these tenants are people of color with low income and little wealth, who more often live in older housing in poorer neighborhoods. Prof. Czapanskiy asserts deference to a landlord’s apparent absolute power to withhold consent is questionable law. Exploring the limits of property and the contours of tenant’s rights and duties (to possession and to avoid waste) vis-à-vis the rights and duties of landlords (to the reversion of the premises and to maintain the premises in a habitable state), she argues for a redefinition of property in this dynamic, which she sees as on the “edges” of property rights, i.e., where private and public interests “inevitably interact and where both must somehow be accommodated,” to constrain a landlord’s right to refuse access for purpose of replacing private-side lead service lines. Already, a handful of jurisdictions are requiring landlords to remove and replace such lines under penalty of fines and loss of business licenses. She makes a solid case for this movement in the law.

Real Covenants

Should all real covenants bind successors, just because they say so? Prof. Mark Kelman, in Revisiting Touch and Concern: The Perils of Degraded Contracts versus the Perils of Opportunism, 9 Tex. A&M J. Prop. L. 263 (2023), thinks not, at least from a contracts perspective. In this article, he focuses on the “touch and concern” element for creating a real covenant, exploring how the term can be difficult to apply and lead to some burdensome results. His theme is that there is little reason to presume that the deal the original covenanting parties made to bind successors would be one that the successors would strike. On this point, Prof. Kelman states that from the vantage of successors, we would probably just adopt a blanket rule that promises are terminated upon conveyance. But this would just nullify the whole concept of real covenants—they automatically run to benefit and burden successors and would defeat investments and expectations of promises. This feature is grounded in the touch and concern requirement. Prof. Kelman proposes that a “promise touches and concerns the land if and only if it is location-specific in the sense that the benefits or burdens of fulfilling the promise are different if the bound party occupies a particular parcel than they would be for someone at other locations.” He rejects the contention made by the Restatement (Third) of Property: Servitudes (2000) that “touch and concern” is needless; that reliance on ex ante disavowal of unreasonable, idiosyncratic or spiteful covenants, coupled with ex post reformation of promises in which benefits and burdens have dramatically shifted, as both overbroad and underinclusive. Some rational promises may not be idiosyncratic, yet they make land unproductive if they have nothing to do with the land. Also, he believes that relying exclusively on ex post reformation, such as changed conditions and relative hardship, is a poor idea because many promises that should not be deemed to touch and concern would still bind because neither burdens nor benefits have shifted dramatically enough. Reforms of the doctrines governing real covenants to lighten the burdens on the promisors risk nullifying too many deals that the promisees ought to be able to rely on. Real covenants are murky indeed. Prof. Kelman’s insights merit great attention.

Real Estate Finance

In the current turbulence in the financial world, some lenders try to hedge losses through what appears to be a quick and efficient remedy in the event of default by the borrower. Dual collateral loans are secured by both a mortgage on real property and a security interest in the mortgagor entity that owns the real property. Stuart Glick and Vivian Arias, in Applying Well-Settled Law to Dismantle the Clogging of the Equities Argument for Dual Collateral Loans, Real Estate Fin. J. 31 (Spring 2023), show how this very modern finance tool can be frustrated by a very ancient concept—clogging the equitable right of redemption. The lender, rather than being required to foreclose on the real property, can simply declare a default and sell the ownership interests in the entity. The authors maintain that while the theory may appear to have some superficial appeal at first blush, it utterly fails on close examination; the principal reason being that the mortgagor, a corporate entity, is a separate legal entity from its owners. The article sums up the issues very neatly.


Colorado amends landlord-tenant law to prohibit certain clauses in leases. Residential leases may not contain one-way fee-shifting clauses or waivers of the implied covenant of quiet enjoyment, the implied covenant of good faith and fair dealing, and the right to a jury trial and may not require fees other than for possession. 2023 Colo. Ch. 372.

Colorado amends mortgage law. The amendment suspends the repayment obligation of a borrower whose principal residence becomes uninhabitable due to a force majeure event, including severe weather, Act of God, act of war, or any other cause beyond the control of the borrower and that could not have been prevented by the borrower while exercising reasonable diligence. 2023 Colo. Ch. 440.

Florida enacts law to prevent title fraud. The provisions establish a Title Fraud Prevention Through Identify Verification Pilot Program, under which a recorder of deeds may require a government-issued photo identification of persons presenting deeds or other legal instruments for recording. The law also establishes a recording notification service, under which landowners can register to receive notifications of recordings affecting their titles. 2023 Fla. Laws ch. 238.

Illinois adds immigration status as a protected characteristic under Human Rights Act. Immigration status means a person’s actual or perceived citizenship or immigration status. The amendment prohibits discrimination in the person’s access to housing, with certain exemptions. 2023 Ill. Laws 232.

Maine enacts law to prevent unfair brokerage agreements. The law prohibits certain provisions, including binding future owners to the agreement, assignments without consent of the owner, creation of liens or encumbrances, and charging fees for services not provided. Long-term agreements that purport to bind the owner to list the property at some unspecified future date or a listing with a term of more than two years may not be recorded. Monetary penalties for violations apply. 2023 Me. Laws 290.

Texas requires mortgagees to file release within 60 days of payoff of loan. If the mortgagor requests a release within 20 days after payoff, the mortgagee or service provider must file a release within 30 days after request. 2023 Tex. HB 219.

Texas amends tax code to authorize sale of certain seized or foreclosed property to an owner of an abutting property without conducting a public sale. The amendments apply to otherwise unusable strips of land located in a flood zone. 2023 Tex. SB 2091.

Texas amends property code to allow extensions and amendments of restrictions and to allow the removal of restrictions relating to race, religion, or national origin. Extensions are allowed for certain older subdivisions, and a two-thirds vote of the property owners is required. Unconstitutional restrictions cannot be extended. 2023 Tex. HB 1558.

Texas enacts law to preclude challenge that conveyance is sham or pretended sale. A grantor is estopped from challenging a deed conveying land other than an urban homestead to an entity when accompanied by an affidavit by the grantor acknowledging the conveyance. 2023 Tex. HB 207.