Leaseholds

Estoppel by deed does not require reliance

/ Consumer Protection, Estates and Future Interests, Leaseholds, Real Estate Transactions, Statute of Frauds, Title Issues

The Pennsylvania Supreme Court has reaffirmed and applied the doctrine of estoppel by deed in the case of Shedden v. Anadarko E. & P. Co., L.P, 136 A.3d 485 (Pa. 2016) and distinguished it from the doctrine of equitable estoppel. Equitable estoppel “recognizes that an informal promise implied by one’s words, deeds or representations which leads another to rely justifiably thereon to his own injury or detriment, may be enforced in equity” while “[i]n contrast, the doctrine of estoppel by deed precludes one who conveys an interest in land that he does not own, but subsequently acquires the title thereto, from denying the validity of the first conveyance.” In this case, an owner leased oil and gas rights to a 62-acre parcel while actually owning only 50% of them. When the owner later acquired the other 50% of the oil and gas rights, the doctrine of estoppel by deed folded those …

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Anticompetitive covenant in shopping center lease broadly construed

/ Leaseholds, Real Estate Transactions, Restraints on Alienation, Servitudes

Following Florida law, the Eleventh Circuit construed the terms of restrictive covenants in shopping center leases broadly. Winn-Dixie Stores, Inc. v. Dolgencorp, LLC, 746 F.3d 1008 (11th Cir. 2014). The covenants were part of the leases granted to Winn-Dixie supermarkets and protected it from competition by limiting the ability of other stores to sell “staple or fancy groceries” to a discrete “sales area.” Traditionally, ambiguities in covenants were construed to limit the covenant, freeing the servient estate owner to a broader use of its property and Florida precedents have adopted that  position. Moore v. Stevens, 106 So. 901, 903 (Fla. 1925) (ambiguous “covenants are strictly construed in favor of the free and unrestricted use of real property”). However, applying a recent holding from a Florida state court, see Winn-Dixie Stores, Inc. v. 99 Cent Stuff-Trail Plaza, LLC, 811 So.2d 719 (Fla. Dist. Ct. App. 2002),  the Eleventh Circuit held that the term “groceries” applied not …

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HUD Guidance on discriminatory refusals to rent to tenants with criminal records

/ Antidiscrimination Law, Fair Housing Act, Leaseholds, Real Estate Transactions

Now that the Supreme Court has definitively found that the federal Fair Housing Act, 42 U.S.C. §§3601-3631, prohibits practices that have a disparate impact on protected groups, see Tex. Dept of Hous. & Comty. Affairs v. Inclusive Comtys. Project, Inc., 135 S. Ct. 2507 (U.S. 2015), consequences of that decision are becoming more clear. On April 4, 2016, the Office of General Counsel for the U.S. Department of Housing and Urban Development (HUD) issued a Guidance on the application of the Fair Housing Act to decisions by landlords and sellers related to tenants and buyers with criminal records. Office of General Counsel on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real-Estate Related Transactions (Apr. 4, 2016). The Guidance notes that a greater percentage of African Americans and Latinos than whites have criminal records. The refusal to rent or sell to persons with criminal records may …

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Retroactive restraint on short term leasing by homeowners association upheld by Idaho Supreme Court

/ Condominiums and Homeowners Associations, Consumer Protection, Leaseholds, Real Estate Transactions, Restraints on Alienation, Servitudes

When a homeowner’s association voted to amend the declaration of covenants, conditions, and restrictions to prohibit short term leasing of units (rentals for less than six months), one of the townhouse owners sued to declare the retroactive restraint on alienation invalid. However, the Idaho Supreme Court found the retroactive restraint to be valid; it neither constituted an unreasonable restraint on alienation or exceeded the scope of the powers of the association to amend the declaration retroactively. Adams v. Kimberley One Townhouse Owner’s Ass’n, 352 P.3d 492 (Idaho 2015). The court held that the amendment to the declaration was merely an interpretation of what it meant to devote the property to single-family residential purposes and thus could not be unduly surprising to the owner. Moreover, the association had the power to amend the covenants and that amendment power subjected the individual owner to retroactive changes in ownership rights. While some courts would …

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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).

Tenants protected from retaliatory eviction need not prove landlord’s subjective intent, only that the tenants protected actions were the “but for” cause of the eviction

/ Consumer Protection, Leaseholds

Tenants who complained about the electrical system and were then evicted could prove retaliatory eviction and stave off eviction merely by showing that their protected action was the “but for” cause of the eviction. They need not prove the landlord’s subjective intent and the eviction following their complaint placed the burden on the landlord to show that the eviction was not retaliatory. Elk Creek Mgmt. Co. v. Gilbert, 303 P.3d 929 (Or. 2013).

Public housing tenant can be evicted for criminal drug use without any protections otherwise available under state law

/ Leaseholds

A Wisconsin state statute provides tenants a 5-day right to cure any violation of the lease terms before being evicted. Wis. Stat. §704.17(2)(b). But the Wisconsin Supreme Court concluded that public housing tenant who engages in drug-related activity can be evicted without a right to cure because federal law (the Anti-Drug Abuse Act of 1988, 42 U.S.C. §1437d(1)(6), provides that any such activity is grounds for eviction. The state statute was preempted by federal law and thus could not stand as an impediment to the eviction. Milwaukee City Hous. Auth. v. Cobb, 860 N.W.2d 267 (Wis. 2015).

Housing discrimination by town officials still a problem

/ Antidiscrimination Law, Consumer Protection, Due Process, Fair Housing Act, Leaseholds, Real Estate Transactions

A number of recent cases has revealed the persistence of racial discrimination affecting municipal decisions about housing. The Sixth Circuit found, for example, in Hidden Village, LLC v. City of Lakewood, Ohio, 734 F.3d 519 (6th Cir. 2013), that town officials may have engaged in a campaign of harassment designed to induce African American residents to move out of town. The case involved a Lutheran religious organization that helped young people released from foster care or juvenile detention to enter society. The organization found a helpful landlord willing to rent apartments to the organization’s clients. At first the town officials argued that this amounted to an institutional use in violation of the zoning law but the town planning commission found otherwise. At that point, the complaint alleges that town officials began a campaign of police harassment that involved citations for minor offenses and unreasonable searches of apartments. The Sixth Circuit concluded that …

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Rent escrow law held constitutional

/ Consumer Protection, Due Process, Leaseholds

The Ninth Circuit has upheld a city administrative program that regulated landlords whose buildings violated the housing code by allowing tenants to pay a reduced rent into a publicly administered escrow fund which is paid to the landlord once the violations are corrected.    Sylvia Landfield Trust v. City of Los Angeles, 2013 WL 4779664 (9th Cir. 2013). Four landlords challenged the program as a violation of their substantive rights under the due process clause. The court upheld the program because it was rationally related to the legitimate government goal of enforcing the housing code to protect tenants from unsafe conditions.The landlords had claimed that the tenants caused the problems, that their properties were not sufficiently substandard to warrant application of the law, and that the program was intended to enrich the government. The court rejected all these claims, noting that the law allowed landlords to prove that tenants were responsible …

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Foreclosure purchaser cannot use self-help to evict tenant at will

/ Leaseholds, Real Estate Transactions

New Hampshire law allows tenancies to be created at-will; that means they can be terminated by either party at any time. When the landlord lost the property through foreclosure, the tenancy ended automatically and no new landlord/tenant relationship was established merely because the tenant kept living on the property. Nor did a state statute that specifically prohibited self-help eviction, N.H. Ev. Stat. §540-A, apply in such a case. Nonetheless, the New Hampshire Supreme Court ruled that summary process was available to evict recover possession of the property and that this available procedure impliedly removed the self-help option. Evans v. J Four Realty, LLC, 62 A.3d 869 (N.H. 2013).

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