Title Issues

A possessor without title can lease land to a tenant

/ Leaseholds, Real Estate Transactions, Title Issues, Trespass

The Alabama Supreme held that a possessor of land can lease it to another and that the lease is enforceable against by the tenant. Hembree Ins. Tr. V. Maple Indus., Inc., 2025 WL 1085479 (Ala. 2025). The lease in this case said that a lease in the name of an individual is valid even though the property was actually owned by a limited liability company (an LLC) owned by the individual. The court noted that “a party need not be the owner of a property to lease it to another. While the right to let property is an incident of the title and possession, a lessor may validly lease property to another, despite the fact that the title to the property is in a third person, if the lessor lawfully possesses the property.” This is arguably an application of the doctrine of relativity of title, which holds that a peaceable …

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Real property can be partitioned based on equitable factors even if only party’s name is on the deed

/ Concurrent or Common Ownership, Marital Property, Title Issues

North Dakota law allows partition of real property when two parties intend to share ownership of the house, and they both contribute to its purchase and/or maintenance, even if the deed is in the name of only one of the parties. Berger v. Repnow, 2025 ND 25, 16 N.W.3d 452 (N.D. 2025) (applying N.D. Cent. Code §32-16-01. The court explained that North Dakota law affirms that “although legal ownership of property is strong evidence of an intention to not share property, legal ownership is not dispositive when the person who is not the legal owner has financially contributed to the acquisition of the property.” However, the court held that the trial court erred in granting title to the house to one of the parties rather than dividing it between them by “determin[ing] the parties’ respective ownership interests based on their contributions to [the] property and any other relevant factors, and …

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Bank with actual knowledge of intent to create homeowners association bound by covenants even though the mortgage was recorded before the homeowners association declaration

/ Condominiums and Homeowners Associations, Mortgages, Real Estate Transactions, Servitudes, Title Issues

An appellate court in New Jersey held that a bank that received a mortgage on a piece of property was bound by a later-recorded homeowners association covenants because it had actual knowledge that the developer planned to subject the property to the declaration. Fulton Bank of N.J. v. Casa Eleganza, 473 N.J. Super. 387, 281 A.3d 252 (N.J. App. Div. 2022). This was the case even though New Jersey had a race-notice recording act and the declaration was recorded after the mortgage was recorded. The court used the equitable doctrine of equitable subrogation to change the order of priorities to avoid injustice. Because the bank was subject to the covenants, it was obligated on foreclosure to pay past due fees to the association. This result conflicts with the approach taken by the California Supreem Court in Riley v. Bear Creek Planning Committee, 551 P.2d 123 (Cal. 1976), which freed an owner from covenants …

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Real estate sellers cannot change their minds once a contract is signed

/ Real Estate Transactions, Title Issues

The Massachusetts Land Court has reaffirmed a traditional rule of law that parties to a real estate contract involving the sale of land have the right to demand specific performance. In this case, that meant that, once a land sales contract is signed by both parties, the buyer is entitled to a judgment ordering the seller to go through with the sale; the seller has no right to change their mind and refuse to sell. The court noted that this rule applies equally to buyers and sellers. Niziak v. Daniels, 2021 WL 6013961, at *7 (Mass. Land Ct. 2021).

Loan modification agreements unenforceable unless in writing

/ Mortgages, Statute of Frauds, Title Issues

An appellate court in California has held that the state’s statute of frauds require loan modification agreements to be in writing to be enforceable. Reeder v. Specialized Loan Serv., LLC, 2020 WL 4345001 (Cal. Ct. App. 2020). This is an expected application of the statute of frauds but it does not mean that some courts, in other factual settings, might make exceptions if the lender engaged in fraud (made a false statement that induces reliance on the part of the borrower), or estoppel (a lender statement that the borrower reasonably relies on in changing their behavior), or that there might be a consumer protection claim for deceptive business practices if something short of fraud but nonetheless deceptive communications wind up hurting the borrower.

Marketable title act extinguishes easement by necessity

/ Easements, Servitudes, Title Issues

In a surprising decision, the Vermont Supreme Court held that an easement by necessity must be recorded or it will be lost by operation of the state’s marketable title act. Gray v. Treder, 2018 VT 137, 204 A.3d 1117 (Vt. 2018). The facts of the case were unusual, however, because the easement in this case was not clearly visible by physical evidence of its use. That will ordinarily not be the case because easements by necessity are required to obtain access to the land and most owners will visibly use those easements to obtain access. In this case, however, because the landlocked ninety-acre parcel had remained undeveloped for the period defined by the Marketable Title Act. The court’s ruling was based on its interpretation of the statute and because it was bound by that statutory language. In addition, the statute provided the landlocked owner a method to preserve an easement by …

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Easement by necessity extinguished by marketable title act

/ Easements, Servitudes, Title Issues

Vermont’s marketable title act, Vt. Stat. tit. 27, §604(a), allows preservation of claims established more than forty years ago if they are re-recorded but does not require easements to be re-recorded if they are visible or evidenced by a “recorded agreement.” In Gray v. Treder, 2018 VT 137, 2018 Vt. LEXIS 237 (Vt. 2018), the Vermont Supreme Court held that easements by necessity fit into neither of those categories and thus need to be re-recorded every forty years to preserve them. While the case resulted in a landlocked parcel, the Court found the statutory policies of clearing title to be more important than ensuring access to a landlocked parcel.

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