Real Estate Transactions

Short term rental use held not to violate covenant prohibiting “commercial activity”

/ Condominiums and Homeowners Associations, Real Estate Transactions, Servitudes

The courts continue to split on this question with the majority holding use of property for short-term rental (such as vacation rental or Airbnb use) is a residential rather than a commercial use. The Wisconsin Supreme Court has joined the courts that have found short-term home rentals to be consistent with a covenant prohibiting “commercial activity.” Forshee v. Neuschwander, 914 N.W.2d 643 (Wis. 2018). The court noted that “[p]ublic policy of the State of Wisconsin favors the free and unrestricted use of property…Accordingly, restrictions contained in deeds and in zoning ordinances must be strictly construed to favor unencumbered and free use of property. Consequently, in order to be enforceable, deed restrictions that limit the free use of property must be expressed in clear, unambiguous, and peremptory terms.”

Access easement found even though not noted on certificate of title to registered land

/ Easements, Real Estate Transactions, Title Issues

Massachusetts courts have several times ruled that access easements may be recognized even though language creating an express easement may be missing or ambiguous in the deeds to the servient estate. Hickey v. Pathways Ass’n, 37 N.E.3d 1003 (Mass. 2015) (access easement recognized over registered land even though it is not in the certificate of title to servient estates when mention of it appears in titles to the dominant estates and maps indicating the easement were recorded at the registry and available to the servient estate owners before purchase); Reagan v. Brissey, 844 N.E.2d 672 (Mass. 2006) (right to use lots as parks found from recorded map). See also Loiselle v. Hickey, 107 N.E.3d 1205 (Mass. App. Ct. 2018); Leahy v. Graveline, 971 N.E.2d 307 (Mass App. Ct. 2012) (both interpreting ambiguous recorded maps and deeds to determine if neighboring owners have access easements).

City has no sovereign immunity from suit by its tenants when it leases land in a “proprietary capacity”

/ Leaseholds, Real Estate Transactions, Title Issues

Although cities enjoy sovereign immunity from suit when they act in a sovereign capacity, they can be sued by tenants of land they have leased when they act in a “proprietary” capacity. Wasson Interests, Ltd. V. City of Jacksonville, 2018 Tex. LEXIS 999 (Tex. 2018). Cities act in a governmental capacity (and are immune from suit) when they perform traditional government functions for the benefit of the public or when they act at the direction of the state. Here the court found that the leases were made  in a proprietary fashion (a) when they engage in acts solely for the benefit of those in the cities; and (b) when it had no obligation to lease the lots to private parties; and (c) it was not acting as a branch of the state when it leased the property.

Possibility of reverter or right of entry cut off after 30 years

/ Estates and Future Interests, Real Estate Transactions, Restraints on Alienation, Title Issues

Massachusetts law sets a thirty year limit to possibilities of reverter following a fee simple determinable or rights of entry following a free simple subject to condition subsequent. Mass. Gen. Laws ch. 184A, §7. This contrasts with the 90 year limit for executory interests. Mass. Gen. Laws ch. 190B, § 2-901. The 30 year limitation was recently applied in Town of Winchendon v. Brandywine Farms, Inc.,2018 Mass. LCR LEXIS 91, 2018 WL 2297177, 26 Land Ct. Reporter 253 (Mass. Land Ct. 2018).

Section 8 (housing voucher) tenants cannot be evicted without cause even if their lease term has expired and the landlord has opted out of the housing assistance program

/ Consumer Protection, Homelessness, Leaseholds, Real Estate Transactions, Restraints on Alienation

The Third Circuit has ruled that the federal statute, 42 U.S.C. §1437f(t)(1)(B), that gives Section 8 (housing voucher) tenants the right to “remain in their housing developments, even after their landlord has opted out of the federal housing assistance program,” gives them the right to stay unless just cause can be shown to evict have the right to remain even if the lease term has expired. Hayes v. Harvey, 2018 U.S. App. LEXIS 24848 (3d Cir. 2018).

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