Foreclosure at 10% of fair market value shocks the conscience and justifies setting aside the foreclosure sale, but sale under 30% is valid unless is evidence of unfairness other than inadequacy of price

/ Mortgages

The Alabama Supreme Court has held that a foreclosure sale is invalid if the foreclosure price is unconscionably low. In Collins v. W. Ala. Bank & Trust, 2025 WL 2627910 (Ala. Sept. 12, 2025), it held that sale for 10% of fair market value is, by itself, a sufficient reason to undo the sale. However, sales for 30% or less (meaning for 10% up to 30%) are valid unless there is other evidence of “unfairness, misconduct, fraud, or even stupid management.” Since the sales were were for 47.5% and 26.4% of its fair market value, they were valid because the owners could not show “other circumstances” that would justify setting aside the foreclosure. Collins v. W. Ala. Bank & Trust, 2025 WL 2627910 (Ala. Sept. 12, 2025). While this case reflects the prevailing law, it seems to violate the legislative intent behind foreclosure statutes and arguably wrongfully strips owners of …

Foreclosure at 10% of fair market value shocks the conscience and justifies setting aside the foreclosure sale, but sale under 30% is valid unless is evidence of unfairness other than inadequacy of price Read More »

Easements by necessity remain attached to the dominant estate even if they are not used for a long time

/ Easements, Servitudes

The Idaho Supreme Court held, in Easterling v. Clark, 574 P.3d 349 (Idaho 2025), that statutes of limitation that require suit within four years of the claim accruing did not apply to easements by necessity because owners of land benefited by such easements have vested interests in the right to reach a public way. Non-use for a long time does not result in a loss of rights.

Pennsylvania does not allow joint tenants to sever the right of survivorship by a deed to themselves

/ Concurrent or Common Ownership

In this case, a mother conveyed real property to her son and to herself as joint tenants. Later the mother sued for partition and then attempted  to sever the joint tenancy from conveying her 50 percent interest to herself. The mother died before the partition proceedings had finished and she left her  50 percent interest to her daughter. If her deed to herself severed the joint tenancy, the daughter would win and own a 50 percent interest as a tenant in common with her brother. If the deed did not sever the joint tenancy and end the right of survivorship, the brother would own a 100% interest and the daughter would own nothing. Affirming the rulings of the lower courts, the Pennsylvania Supreme Court held in Grant v. Grant, 341 A.3d 685 (Pa. 2025), that you cannot sever a joint tenancy by conveying your fractional interest to yourself. The court …

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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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Foreclosure price of 10% of market value not so unconscionable as to set aside the sale, given legal uncertainties about which mortgage had priority

/ Mortgages

Another court holds that a foreclosure sale at a very low value (10% of fair market value) is not a problem, does not “shock the conscience” and is not enough to set aside the sale. This case is by the District of Columbia Court of Appeals (the supreme court of D.C., not the federal court with a similar name). Flagstar Bank v. Advanced Fin. Invs., LLC, 333 A.3d 851 (D.C. 2025). The court approved a sale for $26,000 of property worth $256,632.00. The court explained its reasoning by noting that at the time of the foreclosure sale, the law was unclear as to whether the property was subject to an undischarged mortgage held by a third party. If that were so, the total debts of the homeowner would exceed the value of the property, and the homeowner would have been entitled to nothing in any event. In that light, $26,000 …

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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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Esthetic regulation of property may be a taking when not connected to historic preservation

/ Historic Preservation Law, Takings

The Fifth Circuit Court of Appeals held that esthetic regulation of the appearance of property may constitute a regulatory taking under the Fourteenth Amendment. Money v. City of San Marcos, 2025 WL 429980 (5th Cir. 2025). The façade of the home in an historic district had  the initial (a “Z”) of a prior owner who was associated with the Ku Klux Klan. The current owners wished to remove the emblem and sought permission to do so from the city’s historic commission. When the commission denied their request, they sued, claiming a taking of their property without just compensation. The home is in an historic district but the home itself is not designated as an historic home. The historic district regulations prohibit altering any visible portion of the property without consent of the historic commission, which it refused to give in this case. The homeowners argued that the ordinance requirement that …

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Joint tenancy not severed by tax lien before foreclosure

/ Concurrent or Common Ownership

States disagree about what acts are sufficient to sever a joint tenancy and end the right of survivorship. The Maine Supreme Judicial Court has held that a tax lien, by itself, does not sever a joint tenancy before foreclosure. Estate of Priest, 2025 ME 24, 331 A.3d 451 (Me. 2025). In this case the property owners paid the delinquent taxes before expiration of the 18 month redemption period, and that payment was confirmed by quitclaim deeds issued by the town. Because there was no severance, the surviving joint tenant became the sole owner of the property on the death of her co-owner husband.

Restraints on sale of tenancy in common interests are void even if intended to keep the property in the family

/ Concurrent or Common Ownership, Restraints on Alienation, Wills and Inheritance

A homeowner created a trust that would transfer title to her home to her three children at her death, but also provided that the children could not sell the property to anyone but their siblings and for an amount below fair market value. A state court in California held the restraint on alienation unreasonable and void both because it severely limited the class of potential buyers and denied the owners the fair market value of their interests. Godoy v. Linzer, 327 Cal. Rptr. 3d 323 (Ct. App. 2024). The court was applying a long-established California statute that provides that restraints on alienation are void when “repugnant to the interest created.” Ca. Civ. Code §711. That provision has been interpreted to allow restraints on alienation when reasonable, but the court found that there is a very strong presumption of invalidity of restraints on fee simple interests. Courts sometimes uphold restraints on …

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