Author name: jsinger

Buyer may sue seller for fraudulent failure to mention flooding problem despite “as is” clause in real estate sales contract

/ Consumer Protection, Real Estate Transactions, Statute of Frauds, Title Issues

When real estate contracts contain an “as is” clause or state that the buyer is not relying on any oral statements made by the seller, some courts hold that the buyer cannot sue the seller for fraud even if the seller lied about the condition of the premises or failed to reveal material facts any reasonable buyer would want to know. But other courts allow claims for fraud on the ground that sellers cannot be allowed to immunize themselves from liability for fraud by contract language. In McNulty v. Chip, 116 A.3d 173 (R.I. 2015), buyers of a home experienced serious flooding within weeks of buying the place. Rather than an all-or-nothing solution, the Court held that the sales contract had not been worded specifically enough to protect the seller from a fraud claim. While the contract said that the property was being sold “as is,” nothing specific was stated about …

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Eleventh Circuit rejects publicity rights claim for Rosa Parks

/ Intellectual Property, Personal Property

In a well-known case, the Georgia Supreme Court upheld a publicity rights claim brought by the estate of Martin Luther King. Martin Luther King Jr. for Social Change v. American Heritage Products, 296 S.E.2d 697 (Ga. 1982). The court enabled the estate to prevent the sale of plastic busts of Dr. King by a seller who had not been authorized to do so by the estate. However, in Rosa and Raymond Parks Inst. for Self-Development v. Target Corp., 2016 WL 25495, the Eleventh Circuit found that the Michigan Constitution’s guarantee of free speech rights prevented recognition of publicity rights in the estate of Rosa Parks. The seller in that case marketed various items adorned with images of Rosa Parks or which concerned her life, including a plaque showing Parks with Dr. Martin Luther King, Jr., six books, and a movie. The court found that Michigan’s state constitutional protections for free speech included …

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Prescriptive easement granted when servient owner knew about but did not interfere with longstanding use of a path to access the waterfront

/ Easements, Servitudes, Trespass

The Massachusetts Land Court granted a prescriptive easement to neighbors who crossed a path on foot or on bicycle to get to the waterfront. Fantoni v. Assad, 2015 Mass. LCR LEXIS 108, 2015 WL 4208469 (Mass. Land Ct. 2015). The owner of the servient estate was aware that neighbors were using the path but did not stop them or object until an altercation broke out when one of the walkers kicked a neighbor’s dog. The court applied the traditional rule presuming the use to be adverse in the absence of any evidence of consent or permission. Once open use is established for the twenty-year statutory purpose, the burden is on the servient owner to show that permission was given for the use. If no permission can be shown by the servient owner, the access is presumed to be adverse. A minority of states now go the other way, presuming that limited use …

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House built on land leased from town is a fixture that belongs to the town at the end of the lease

/ Leaseholds, Real Estate Transactions, Trespass

Seasonal residents built homes on land leased from the town. The Massachusetts Court of Appeals held that the structures were fixtures that belong to the land owner when the leases terminated. Language to the contrary could have been inserted into the leases to classify the homes as personal property that could be removed at the end of the lease. Or the contracts could have granted the tenants an option to buy the land. Because the leases did neither of these things nor made any other arrangements, the common law presumption  prevailed that structures fixed to the land belong to the landowner. Touher v. Town of Essex, 36 N.E.3d 40 (Mass. App. Ct. 2015).

Forged acknowledgment in recorded deed means that it does not transfer title

/ Real Estate Transactions, Statute of Frauds

In a dispute between a brother and sister over ownership of the family home, the sister contended that a deed from her mother to her should prevail over an earlier deed from her mother to the brother because she was never made aware of the earlier deed and because the acknowledgment on the deed was forged. An acknowledgment is a notarized statement that the grantor personally signed the deed. In this instance, the grantor (the mother) had not personally signed the deed in the notary’s presence. The acknowledgment was therefore defective. The court held in Allen v. Allen, 16 N.E.3d 1078 (Mass. App. Ct. 2014), that state statute prohibited such a deed from providing constructive notice to a later purchaser. Thus the sister’s property claim prevailed over that of the brother.

Court finds sufficient evidence that an easement was abandoned

/ Easements, Servitudes

In Mello v. Town of Dighton, 2015 Mass. Super. LEXIS 48 (Mass. Super. Ct. 2015), the Massachusetts trial court found sufficient evidence to conclude that an easement was abandoned. The proof in such cases is high; mere non-use does not constitute abandonment. More direct evidence of intent to abandon is required. In this case, the easement was owned by a railroad and the railroad’s bankruptcy trustees conclusively demonstrated their intent never to make use of the easement by expressly abandoning it and stating that the easement was not needed for the railroad’s operations.

Colorado Supreme Court holds that an option that can be canceled any time before its exercise does not violate the traditional rule against perpetuities

/ Real Estate Transactions, Restraints on Alienation, Title Issues

The Colorado Supreme Court has held that the traditional rule against perpetuities does not invalid an option, even if it has no time limit, if it can be canceled at any time before its exercise, at least where the price for the option is set at the market value of the property and it was agreed to by sophisticated parties. Atlantic Richfield Co. v. Whiting Oil & Gas Corp., 320 P.3d 1179 (Colo. 2014). The court reasoned that what mattered was not the lack of time limitation but whether the option imposed an unreasonable restraint on alienation and concluded that it did not under these circumstances.

Developer stopped from converting golf course into housing by implied servitude arising out of marketing the golf course as an amenity for nearby homes previously sold by the developer

/ Easements, Servitudes, Statute of Frauds, Title Issues

A developer marketed homes as being next to a golf course with the golf course noted on sales material and the recorded plat. When the developer later tried to convert the golf course into residential lots, the homeowners sued, claiming an implied servitude. Despite the lack of any express covenant in the deeds, the court found the presence of the golf course with the designation as a “golf course” to be sufficient to find the property restricted to golf course purposes. Riverview Cmty. Grp. v. Spencer & Livingston, 337 P.3d 1076 (Wash. 2014). Similar cases include Agua Fria Save the Open Space Ass’n v. Rowe, 255 P.3d 390 (N.M. 2011); Reagan v. Brissey, 844 N.E.2d 672 (Mass. 2006).

Texas Supreme Court affirms distinction between easements implied from prior use and easements implied from necessity

/ Easements, Servitudes

The Texas Supreme Court has affirmed that easements by necessity exist when an owner sells a landlocked parcel that has no access to a public road. That owner (and subsequent) owners have a right to go over remaining land of the grantor to access to public way. For such a right to be recognized, there must be no alternative access to a public road. The court also found that it presumes that the parties intended to create such an easement and that evidence to the contrary would defeat the claim. (In contrast, some courts hold that owners have no power to create landlocked parcels even if that is the intent of the parties.) “To successfully assert a necessity easement, the party claiming the easement must demonstrate: (1) unity of ownership of the alleged dominant and servient estates prior to severance; (2) the claimed access is a necessity and not a …

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House that substantially encroaches on neighboring property is a continuing trespass and neighbor has the right ask for its removal

/ Easements, Servitudes, Trespass

When someone intentionally builds a building or part of a building on land owned by another, the land owner may obtain an injunction ordering removal of the trespassory structure. But when someone innocently builds a structure that encroaches on neighboring property, many courts today applied the undue hardship or relative hardshp doctrine and allow the structure to remain on the ground that land owner is partly at fault for not noticing the incursion and stopping it before substantial expense is undertaken by the innocent builder. In such cases, the court usually orders a forced sale of the land on which the building sits. See, e.g., Somerville v. Jacobs, 170 S.E.2d 805 (W.Va. 1969). However, older cases would order removal rather than a forced sale and the Rhode Island Supreme Court apparently prefers the older approach.  In Rose Nulman Park Found. ex rel. Nulman v. Four Twenty Corp., 93 A.3d 25 (R.I. 2014), …

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