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Probate & Property

March/April 2024

Keeping Current—Property

Shelby D Green and Darryl C Wilson

Summary

  • In case, Foreclosure sale after bankruptcy has closed is void when notice of foreclosure was given while bankruptcy was open.
  • In literature, MORTGAGES: In When Disaster Strikes: Authorizing Documents of Rescission for Fraud in North Carolina.
  • In legislation, Tennessee amends residential landlord-tenant law to require more notice of termination to tenants 55 and older.
Keeping Current—Property
Art Wager via Getty Images

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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.

CASES

COMMON INTEREST COMMUNITIES: Challenge to attempted severance of commercial units is not subject to statute of limitations for amendments to declaration. The City Bella on Lyndale (Cooperative), a common interest community created in 2004, included structures of mixed residential and commercial use. When the Cooperative discovered that the arrangement could prevent members of the community from being able to deduct their share of mortgage interest and real estate taxes under Internal Revenue Service regulations, it decided to transfer the commercial property out of the community to a separate entity, City Bella Commercial, LLC (Commercial). Efforts to accomplish that goal included drafting a warranty deed purporting to effectuate the transfer. In 2007, the Cooperative recorded an amended declaration that did not include the commercial property. In 2020, after completing a $2.1-million-dollar repair project, the Cooperative discovered that the attempted severance of the Commercial was never properly completed and sought contribution from the Commercial. The Commercial refused, and both parties sought declaratory relief. The trial court granted summary judgment in favor of the Commercial based on the 2007 amendment reflecting severance and the statute’s two-year limitation on bringing actions challenging the validity of amendments to the declaration. Minn. Stat. § 515B.2-118. The appellate court affirmed, agreeing that the statute barred the Cooperative’s action, but stating that was true regardless of the validity of the 2007 severance attempt. The supreme court reversed. The plain language of the statute applies the two-year limitation to challenges to the validity of amended declarations but does not purport to cover severance actions per se, which was the tenor of the Cooperative’s action—whether the severance was effective. Although amended declarations are part of the severance process, they are not the sole component. City Bella Commercial, L.L.C. v. City Bella on Lyndale, 994 N.W.2d 27 (Minn. 2023).

FORECLOSURE: Foreclosure sale after bankruptcy has closed is void when notice of foreclosure was given while bankruptcy was open. After homeowners defaulted on their condominium assessments, they filed for bankruptcy. The homeowners’ association recorded a notice of foreclosure while the bankruptcy was ongoing. After the bankruptcy proceeding closed, the unit was sold at foreclosure. Thereafter, Wells Fargo brought a quiet title action against the homeowners’ association and the foreclosure purchaser to establish that its deed of trust on the unit survived the foreclosure. The district court granted summary judgment to the association and the purchaser. The Ninth Circuit Court of Appeals reversed, finding that even if Wells Fargo was neither the debtor nor the trustee, it had prudential standing to challenge a violation of the automatic stay. The court went on to invalidate the foreclosure sale. Section 362(a)(4) of the Bankruptcy Code provides that a 90-day stay automatically applies to “any act to create, perfect or enforce any lien against property of the estate.” 11 U.S.C. § 362(a)(4). Not only is a sale conducted during the stay void, but so is a sale occurring after the bankruptcy has closed when the notice of sale was given during the proceeding while the property was part of the bankruptcy estate. Therefore, Wells Fargo’s deed of trust survived the sale. Wells Fargo Bank, N.A. v. Springs at Centennial Ranch Homeowners Ass’n, 2023 U.S. App. LEXIS 27822, 2023 WL 6890086 (9th Cir. Oct. 19, 2023).

LANDLORD-TENANT: Tenant is not entitled to rent setoff for breach of implied warranty of habitability when she did not notify landlord of defects. A residential tenant stopped paying rent and owed $5,000 in arrears when the landlord brought suit for eviction. Although the tenant did not contest that she stopped paying rent, she asserted that the premises were not habitable on account of noise from a commercial tenant next door, lack of heat, and a broken lock on the back door. The trial court found that although the commercial tenant was loud during operating hours, which interfered with the residential tenant’s sleep, she was aware of the business when she decided to rent the unit. Although, for a period of time, the unit lacked heat and the doors were not secure, the tenant failed to give notice to the landlord of the conditions, as required by statute. The trial court granted eviction and declined to award a setoff for a breach of the warranty of habitability. The supreme court affirmed, confirming that under the statute, a tenant may withhold rent when a landlord fails to comply with the duty to provide a habitable dwelling. But this is so only if the tenant gives the landlord notice of defects and allows a reasonable time for the landlord to repair. Here, the tenant admitted that she never notified the landlord. Thus, she was not entitled to any setoff in the rent. Buckley v. Teneva, 2023 Vt. Unpub. LEXIS 119 (Vt. Nov. 13, 2023).

RESTRICTIVE COVENANTS: Covenant limiting use of property to residential purposes does not bar short-term rentals, but prohibition on short-term leases does. In 1984, a vacation community on a Tennessee lake was created subject to a Declaration of Covenants, Conditions & Restrictions (CCRs), which stated that “each Lot shall be used for residential and no other purposes” and that “no gainful profession, occupation, trade or other nonresidential use shall be conducted in any Lot.” The term “lot” was defined as property for “use as a residence by a single family.” The declaration additionally included a process for amending the CCRs. The plaintiff purchased the property in the development in 2015, doing so with the intent to lease it on a short-term basis. He soon began leasing his property to third parties for various periods from two to 28 days. In 2018, the owners amended the CCRs to require that leases be a minimum of 30 days. After continuous violations, the homeowners’ association sent the plaintiff a notice, which the plaintiff responded to by suing the homeowners association for declaratory and injunctive relief from its efforts to limit his rentals. The trial court denied the plaintiff’s motion for summary judgment and granted the homeowners’ association’s motion for the same based in part on the precedent that residential use restrictions prohibited short-term rentals. The appellate court affirmed in all respects. The supreme court, noting the issue to be one of first impression, reversed. The court engaged in an extensive discussion of precedent from numerous jurisdictions as well as a detailed examination of many dictionary sources to determine the best definitions of “used” and “residence” or “residential.” Not finding a decisive resolution in these sources, the court expressly joined the courts from other states, which have found residential-purpose covenants ambiguous because the term “residential” could refer to both long- and short-term stays and thus have interpreted them not to prohibit short-term rentals. Therefore, the plaintiff was not limited by the 1984 CCRs. The supreme court noted, however, the original covenants were amended in 2018 under a provision in the original CCRs reserving the right to impose additional restrictions and obligations on the land. Amendments are generally permissible unless they are arbitrary and capricious, and they are presumed valid. A party arguing against their validity carries the burden of showing the amendments were without reasoning or judgment. Here, the plaintiff failed, the court rejecting his sole argument that the amendments operated retroactively because they did not seek to impose any sanction for prior violations. The amendments’ ban on short-term rentals was thus enforceable. Pandharipande v. FSD Corp., 679 S.W.3d 610 (Tenn. 2023).

STATUTE OF LIMITATIONS: Cause of action for quiet title accrues when owner has actual notice of another’s claimed interest. In 2005, the Pivas conveyed a conservation easement to the Forest Service, giving the right to permit public use of a strip of land “to be utilized as a trail.” A letter sent by the Pivas in 2005 stated that shortly after the conveyance, the Pivas met with the Forest Service to express concerns about the Forest Service’s plans for the trail. Almost a decade later, in a 2014 email, the Pivas wrote that since the meeting nothing had changed in the trail plan. In 2019, the Pivas brought a quiet title action. The Forest Service moved for summary judgment on the grounds that the 12-year statute of limitations had run. The district granted the motion, and the Ninth Circuit Court of Appeals affirmed. The court agreed with the trial court that it was undisputed that, as early as 2005, the Pivas had actual notice of both the Forest Service’s claimed interest in the trail easement and its intent to construct a trail for public use across the easement, such that it was then that the cause of action accrued. Sawtooth Mt. Ranch, LLC v. U.S. Forest Serv., 2023 U.S. App. LEXIS 30521 (9th Cir. Nov. 16, 2023).

TAX LIENS: Unclaimed surplus from tax sale does not escheat to city, but must be paid to junior lienholder. The City of Richmond concluded a tax sale pursuant to a statutory lien, Va. Code § 58.1-3340, generating $50,000. The city awarded itself $19,563 (taxes, interest, penalties) and $9,316 (costs and legal fees), leaving a surplus of $21,171. There were two junior liens: $14,000 held by the heirs of a judgment creditor (Jones) and $100,000 held by Caldwell Trust. The city paid the Caldwell Trust $7,171 and kept the $14,000 in escrow for the Jones heirs. Va. Code § 58.1-3967 provides that a claimant has two years to assert a claim against the sale proceeds. After two years had elapsed and the Jones heirs had not claimed any of the proceeds, the city escheated the $14,000. The Caldwell Trust sued the city for the $14,000, alleging a violation of the state constitution and the Fifth Amendment. The trial court ruled for the city, but the supreme court reversed. Although the statute, by its terms, allowed the escheat of the $14,000, it was nonetheless in violation of the state constitution. A judgment lien gives a right to have the claim satisfied by seizure of the land of the judgment debtor, chargeable on the surplus sale proceeds from a judicial sale. The junior interest is subordinate to any superior liens, such as the Jones lien, but no superior liens were asserted and thus all were extinguished by section 58.1-3967. The fully compensated city had no property interest whatsoever in the unclaimed surplus, such that keeping the surplus for itself instead of awarding it to the junior lienholder violated the state constitution. McKeithen v. City of Richmond, 893 S.E. 2d 369 (Va. 2023).

TAX LIENS: Mortgagee can challenge compliance with statutory mailing requirements even when notice was not returned as undeliverable. In May 2018, the County of Saratoga commenced an in rem tax foreclosure proceeding against real property to satisfy a $9,000 lien. The County allegedly mailed, by both certified and first-class mail, a copy of the petition, notice of foreclosure, and notice of commencement of the tax foreclosure proceeding to the mortgagee, Nutter, at the address that was listed in the mortgage. Although neither the certified letter nor first-class mailing was returned as undeliverable, Nutter’s compliance specialist responsible for receiving tax foreclosure notices stated that no such documents were received. In December 2018, a default judgment in the county’s favor was entered and a deed conveying title of the property to the county was executed. The county thereupon sold the property at auction for $142,500, and the property was resold several months later for $155,000. Later in 2019, a judgment of foreclosure and sale was entered as to the same property in favor of Nutter in a separate foreclosure action that had been commenced against the mortgagors in 2015. Nutter then filed an action to vacate the December 2018 tax claim default judgment and the deeds conveying the property. Nutter moved for summary judgment on the ground that the county “failed to serve [it with] the tax foreclosure petition.” The county cross-moved for summary judgment to dismiss the complaint, submitting affidavits of mailing by both certified and first-class mail—listing Nutter’s address—and the certified mail receipt, as well as an affidavit stating that neither the certified nor the first-class mailing was returned. In response, Nutter noted that there was no postmark on the certified mail receipt and argued that this meant that the certified letter was not, in fact, brought to the post office. Nutter also submitted a tracking history showing that the certified mail was delivered to an unknown P.O. Box, rather than to Nutter’s address. All of these facts, Nutter argued, created a question of fact as to compliance with the mailing requirements of the statute. The trial court granted judgment to the county. On appeal, the intermediate appellate court concluded that the evidence of certified and first-class mailing to the plaintiff’s address, along with proof that the mailings were not returned, established compliance with the statute and that “the presumption of service” set forth in the statute could be rebutted only by “proof establishing that both the certified mailing and the ordinary first-class mailing were returned.” R.P.T.L. § 1125. The court of appeals reversed and remanded. It explained that even though the statute does not require receipt of the notice, the absence of return of the notice is not the only cognizable issue relating to the validity of the notice. Instead, for the notice to be valid, it must comply with the mailing requirements of the statute. Disagreeing with the appellate court, the court explained that the statute does not contain a “presumption of service,” and for that reason, it does not bar an interested party from submitting evidence that calls into question compliance with the mailing requirements. An interested party may introduce evidence showing deficiencies in the mailings. The court found this interpretation consistent not only with the statutory language, but also with the objectives and purposes of the legislature in enacting the current version of the statute, i.e., to impose more stringent notice requirements. Giving the statute a liberal construction “in the owner’s favor,” the court ruled that an interested party is permitted to establish that a taxing authority failed to comply with the notice requirements set forth in R.P.T.L. §1125(1)(b), even when the taxing authority submits proof that notice that was allegedly sent by both certified and first-class mail and was not returned. Nutter & Co. v. Cnty. of Saratoga, 209 N.E.3d 1255 (N.Y. 2023).

TAX SALES: Judicial redemption from tax sale is available only for an owner of the land. In the 1950s, Janice Morrison grew up in a house built by her parents on Lot 25, but her parents built an addition, a driveway, and a fence on neighboring Lot 24. In 2013, the Mays purchased Lot 25 after a mortgage foreclosure and, in the same year, Morrison purchased Lot 24 from the state via a tax sale. The purchasers did not obtain surveys, and they were not aware of the encroachments when they bought. Later, the Mays told Morrison that she was trespassing on their property. Morrison filed suit against the Mays, seeking injunctive relief. The trial court held the Mays, through their counterclaim against Morrison, had judicially redeemed the tax deed and were entitled to possession and title to Lot 24. The court did order the Mays to reimburse Morrison the money Morrison paid for the tax purchase as well as interest on those funds. Morrison appealed. The supreme court reversed and remanded. It explained that there are two methods of redeeming property from a tax sale. “Statutory redemption” requires the payment of specified sums of money to the probate judge of the county in which the parcel is located. Ala. Code § 40-10-120. “Judicial redemption” involves the filing of an original civil action against a tax-sale purchaser (or the filing of a counterclaim in an ejectment action brought by that purchaser). Ala. Code §§ 40-10-82 and 40-10-83. Although the right to statutory redemption expires three years after the date of the tax sale, judicial redemption has no time limit, provided that the claim is brought by an owner of land who has retained either actual or constructive possession. Here, the Mays could not statutorily redeem the property because more than three years had passed since the sale, and they did not follow the prescribed procedures. Because judicial redemption is available only to “owners” and the facts showed the Mays had never owned or held title to Lot 24, they had no right to judicially redeem. Morrison v. May, 2023 Ala. LEXIS 111, 2023 WL 6528473 (Ala. Oct. 6, 2023).

TITLE INSURANCE: Mortgagee’s title insurance policy does not cover loss from foreclosure of HOA’s superpriority lien. Deutsche Bank National Trust Company held a first deed of trust on a condominium unit. Fidelity National Title Insurance issued a lender’s title policy on the property. After the homeowners became delinquent in paying their HOA assessments, the HOA conducted a nonjudicial foreclosure, resulting in the sale of the property. Deutsche Bank’s action to quiet title against the purchaser failed, the court finding that the HOA’s foreclosure operated to extinguish Deutsche Bank’s deed of trust under the superpriority lien statute. Nev. Rev. Stat. § 116.3116. At the same time Deutsche Bank commenced the quiet title action, it filed a claim under its title policy, seeking defense of the title and indemnification. The policy insured against any losses “sustained or incurred by the insured by reason of… [a]ny defect in or lien or encumbrance on the title” or “the priority of any lien or encumbrance over the lien of the insured mortgage.” The policy also incorporated specific endorsements: (1) California Land Title Association (CLTA) 115.2(2) insured against losses sustained by reason of the loss of priority of any lien for charges and assessments in favor of an HOA; (2) CLTA 100(1)(a) provided coverage for losses sustained by reason of CC&Rs that cut off, subordinate, or otherwise impair the insured lien; and (3) CLTA 100(2)(a) covered losses sustained by reason of future violations of CC&Rs, provided they cause impairment or loss of the lien or title to the property. The policy stated that notwithstanding the expressed terms, coverage applied only to claims existing as of the date of the policy. Fidelity refused coverage, asserting that the creation and enforcement of the superpriority lien occurred after the date of the policy and therefore was outside the coverage. The trial court held for Fidelity, and the supreme court affirmed. It explained that the recording of the CC&Rs by the HOA gave record notice and served to perfect an inchoate lien for assessments, thereby establishing superpriority status for up to nine months of assessments. Nonetheless, under the superpriority lien statute, the lien does not become an existing, enforceable lien until assessments are due and unpaid. Here, that happened seven years after the date of the policy. Moreover, to the extent that the deed of trust lost its priority, that loss was not because of the HOA’s lien, but because of the statute. Nev. Rev. Stat. § 116.3116. Because the policy clearly did not cover the loss of priority, Fidelity also had no duty to defend the title. Deutsche Bank Nat’l Trust Co. v. Fid. Nat’l Title Ins. Co., 536 P. 3d 915 (Nev. 2023).

WATER LAW: Challengers to agency’s interbasin transfer of surface water who allege only speculative reductions in water flow lack standing. In 2004, the Department of Natural Resources (DNR) declared a moratorium on new surface water appropriations for various river basins that were subject to five natural resource districts (NRDs). The Platte Diversion Project (PRD) filed an excess flow permit application with the DNR seeking to divert certain excess flow and facilitate an interbasin transfer. The proposed interbasin transfer was made expressly subject to the condition that it would be perpetually junior in status to other water users. Several entities filed objections, and the PRD moved to dismiss the objections, asserting the entities all lacked standing. Following a hearing, the DNR dismissed all challenges on that basis. The entities filed a successful petition to bypass the appellate court and take the matter directly to the supreme court. The supreme court affirmed, starting with the explanation that a party has standing if it has a legal or equitable interest in the controversy. That interest must be a personal stake in the outcome such that invocation of the court’s jurisdiction and exercise of remedial powers on that party’s behalf is justified. Common-law standards are used to determine standing unless the legislature has provided for different standards tailored to specific circumstances. Common-law standing generally focuses on whether the litigant has suffered or will suffer an injury in fact that is traceable to the challenged action. The regulations here contained “textual hooks”—“interested person,” “legally protectable interest,” and “legally cognizable” impact—that implicated common-law standing principles. None of the appellants satisfied the common-law requirements, as some failed to plead particularized harm to a direct interest, and others failed to show injury in fact. They all failed to allege how the proposed diversion would alter the streamflows to such a degree that operations would be affected. The court instructed that merely claiming harm from less water being available in the stream was not enough. The express condition in the permit also made the claimed harms only speculative. Importantly, the court concluded that although any diversion of a limited resource necessarily results in marginally less availability of that resource for others, that reality is not specific harm for standing purposes. In Re Application A-19594, 995 N.W.2d 655 (Neb. 2023).

LITERATURE

LANDLORD-TENANT: In Ending Evictions: The Lived Case For Replacing the Violence of Eviction with the Humanity of a Safety Net, 32 J. Affordable Housing & Comm. Dev. L. 49 (2023), Sam Gilman argues that many of the government responses to the onslaught of evictions that took place during the COVID-19 pandemic can and should be made permanent. He views the status quo legal process for evictions throughout the country to be catastrophically harmful to landlords, evicted families, and society. Gilman is a co-founder of the Community Economic Defense Project based in Colorado, where he has helped develop strategies for eviction assistance there and elsewhere. Focusing on four locations (Philadelphia, Pennsylvania, Houston, Texas, and the states of Colorado and Massachusetts), he outlines what was done during the pandemic and lists the most positive aspects of each location as part of a model foundation proposal. He shows that the negative financial effects of evictions are most significantly felt by Black and Brown minorities, as they are predominantly on the lower levels of the socioeconomic ladder. He claims that the eviction problem, although deeply associated with the legal and economic issues permeating the affordable housing crisis and America’s history of housing discrimination, needs to and can somehow reach its own solutions. Though laudable and certainly aspirational, the article leaves one concerned as to whether the many specifics needed for an eviction-free society can realistically be attained. He believes that emergency response to the pandemic must morph into an alternative arrangement for the new post-pandemic norm. This is particularly imperative as current evictions are now exceeding pre-pandemic levels. Some of that excess is linked to investors buying foreclosure properties during the pandemic and turning those into rental units that have followed the steady trend of marketplace rent increases that are far outpacing income increases for average renters. Gilman acknowledges the presence of valid arguments favoring evictions from the viewpoints of other involved parties such as small-time mortgagees, financial institutions, local government departments, and private service providers. Yet, in his view, those interests and other counterarguments are minimalized, rightfully so at least in the context of tenants’ historically lowly status, with little power over their housing circumstances. The most evident support for his argument is that the multi-billion-dollar allocations of rental assistance alongside moratoria on evictions resulted in 1.36 million fewer evictions in 2021. The author recognizes that universal emergency rental assistance may create moral hazards and drive up inflation which may ultimately drive up rental prices further. But, in his assessment, the costs of homelessness and displacement far exceed the costs of multi-month rental assistance. It is not clear where the billions in aid can come from on a sustained basis nor what regulations can be established to standardize national legal assistance for tenancies under distress. Even as there are broad differences among state law approaches to eviction and a general lack of federal oversight, the article succeeds in portraying eviction assistance as something that needs to be emphasized at a higher level than is currently present.

MORTGAGES: In When Disaster Strikes: Authorizing Documents of Rescission for Fraud in North Carolina, 27 N.C. Bank. Inst. 63 (2023), Jon Schlotterback shows how lenders can attempt to fix the problem of an unintentional release of a mortgage. When a security instrument is accidentally released or satisfied of record, statutes in some states allow either the releasing party or the secured lender to file a “document of rescission” to reinstate the secured lender’s security instrument, thereby restoring both the lien and its original priority position. Based on a study of the law in North Carolina and surrounding states, however, the author shows that these “oops” statutes and their interpreting cases are far from uniform and can provide varying levels of protection. The article explains the current law on how the document of rescission statutes or their equivalents work in North Carolina and surrounding states. As it stands, these document of rescission statutes do not cover fraudulent releases. The main point of the article is to advocate for an amendment to these statutes to cover fraud, asserting that this would benefit owners and lenders alike.

RECORDING: Prof. Laura M. Padilla, in Real Estate Trends: Title and Blockchain Technology, 10 Belmont L. Rev. 234 (2023), gives an insightful analysis of the emerging blockchain technology and its promise to revolutionize record-keeping for real property titles. After a brief history of the traditional method of memorializing recording transfers—recording and title registries—as compared to blockchain technology, she shows that many of the problems with using the traditional name indexes stem from human error, which is largely eliminated by blockchain technology. She does admit that many problems of recording, from mis-indexing and out-of-order recordings, could be avoided or resolved through the uniform adoption of tract indexes, facilitated by the universal adoption of e-recording and digital documents and that may be the predicate for block chain technology. What may be the biggest impediment to its widespread adoption is the associated cost.

TAKINGS: Cedar Point Nursery v. Hassid, 141 S. Ct. 2063 (U.S. 2021), established a new rule in takings law: when the government enacts a regulation allowing a temporary invasion of a property owner’s land, it constitutes a per se taking under the Fifth Amendment, necessitating just compensation. In a student-authored article, Rent Regulations After Cedar Point, 123 Colum. L. Rev. 475 (2023), Abigail Flanigan discusses the implications of the Supreme Court case on the constitutionality of rent regulations and distinguishes between the maximalist and minimalist approaches in interpreting Cedar Point and its exceptions. The maximalist approach suggests that Cedar Point could render rent control laws like New York’s 2019 Housing Stability and Tenant Protection Act (HSTPA), 2019 N.Y. Laws ch. 36, unconstitutional by appropriating the landlord’s right to exclude, an essential property right. This approach raises questions about just compensation, considering the fair market value of the property and the costs incurred by the property owner because of regulation. In contrast, the minimalist approach analyzes potential exceptions like the general public exception and background principles exception, which may support the constitutionality of rent control laws. The general public exception applies to regulations allowing access to properties generally open to the public, distinguishing them from regulations granting access to private property. The background principles exception suggests that certain longstanding background restrictions on property rights are not considered takings. Flanigan contends that the maximalist approach contradicts established legal precedents and poses a threat to anti-discrimination housing laws. She asserts that although the maximalist approach could restrict the state’s ability to regulate housing markets, the minimalist approach may uphold the constitutionality of rent regulations within certain bounds. The difference in recent circuit decisions suggests an ongoing dispute on how Cedar Point applies to rent regulation and landlord-tenant relationships. The Second Circuit, in 74 Pinehurst LLC v. New York, 59 F.4th 557 (2d Cir. 2022), rejected the argument that the HSTPA effected a physical taking of landlords’ property and adopted a version of the “general public” exception. The Eighth Circuit, however, in Heights Apartments, LLC v. Walz, 30 F.4th 720 (8th Cir. 2022), signaled a willingness to take a maximalist approach, suggesting a plausible physical takings claim by property owners challenging a state eviction moratorium. Although the Supreme Court may eventually address this issue, Flanigan advocates for a broad interpretation of the Cedar Point exceptions when courts grapple with constitutional challenges related to rent regulation legislation. The article offers a useful framework for finding some coherence from surface dissonance from these courts.

LEGISLATION

CALIFORNIA enacts law to require transferee mortgage servicers to honor agreements made with original servicer on the use of insurance proceeds for repair after disaster. The requirements apply when a government has proclaimed a state or local emergency. 2023 Cal. Stats. ch. 873.

NEW YORK enacts provisions to address theft of real property. The provisions amend various statutes and authorize courts to stay actions to recover possession or quiet title and warrants of eviction based on a good faith investigation of title theft or fraud in the financing of a transaction. After the commencement of a criminal or civil action charging deed theft or fraud, courts are required to stay all proceedings to recover property or quiet title. The amendments create a rebuttable presumption that a deed is fraudulent upon the conviction of deed theft. A rebuttable presumption of notice of fraud also arises when encumbered property is transferred without an accompanying statement by the mortgagee that the transferee is assuming the mortgage or when the mortgage is satisfied. The amendments authorize the district attorney or office of attorney general to file a notice of pendency in any action charging criminal title theft. 2023 N.Y. Laws 630.

NORTH CAROLINA enacts law to give professional land surveyors right to enter private lands. Entry is authorized for the purpose of locating property corners, boundary lines, rights-of-way, and easements. An exception exists for land containing critical infrastructure that is completely enclosed by a fence or other physical barriers with an indication that entry is forbidden. Entry authorized by the act shall not constitute trespass. The surveyor is required to make reasonable efforts to notify adjoining landowners upon whose land it is necessary to enter. Although surveyors are not liable to landowners except for the destruction or damage to property, a surveyor also has no action against landowners except for damage willfully or deliberately caused. 2023 N.C. Sess. Laws 142.

TENNESSEE amends residential landlord-tenant law to require more notice of termination to tenants 55 and older. A landlord of a property that provides federally subsidized housing for older persons must give 60 days’ notice of termination before evicting when the tenant has paid the rent due and is not in arrears and the termination and eviction are to allow for new property development, which means renovating to provide market-rate housing or to use the property for a purpose other than providing housing to older tenants. 2023 Tenn. Pub. Acts 400. 

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