Homeowners Association architecture regulations must be reasonable and authorized by governing documents

/ Concurrent or Common Ownership, Condominiums and Homeowners Associations

The Nevada Supreme Court adopted §6.7 and §6.9 of the Restatement (Third) of Property (Servitudes) and held that restrictions on construction (including architectural review committees) are only valid if owners are on notice of them and they exercise their powers “reasonably.” Moretto Trustee of the Jerome F. Moretto 2006 Trust, v. ELK Point Country Club Homeowners Ass’n, Inc., 507 P.3d 199 (Nev. 2022). Those sections state that no homeowners association has implied power to regulate the architecture of individual units unless the governing documents (the declaration that establishes the association) explicitly confers that power on the association, and even then, the exercise of that power must be reasonable. In this case, the governing bylaws required owners to get board approval before building any structure on their property. After purchasing a lot subject to the bylaws, the executive board created an architectural review committee and some architectural guidelines. One of the owners […]

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Conflicting rulings on whether testers have standing under the Americans with Disabilities Act (ADA)

/ Antidiscrimination Law

The First Circuit has held that a tester may bring a lawsuit against a hotel for an inaccessible website even if the tester never had an intention of booking a room at the hotel. Laufer v. Acheson Hotels, LLC., 50 F.4th 259 (1st Cir. 2022). The Eleventh Circuit agrees, Laufer v. Arpan LLC, 29 F.4th 1268 (11th Cir. 2022), but the Second, Fifth, and Tenth Circuits disagree, Harty v. W. Point Realty, Inc., 28 F.4th 435 (2d Cir. 2022); Laufer v. Mann Hospitality, Inc., 996 F.3d 269 (5th Cir. 2021); Laufer v. Looper, 22 F.4th 871 (10th Cir. 2022). The issue is likely to be one the Supreme Court will need to resolve.

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Real estate purchase and sale agreement enforceable against the estate of the seller

/ Real Estate Transactions

A contract of sale signed by the seller could be enforced by the buyer against the estate of the seller when the seller died after signing the contract but before the closing. Liberty Hill, LLC v. Fernald (Mass. Super. Ct. 2022) (Civ. Action No. 2281CV00480). State statutes provided for specific performances of real estate contracts when the owner dies prior to conveyance. Mass. Gen. Laws ch. 204, §1.

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Restraint on partition or conversion of joint tenancy interest to tenancy in common is an invalid restraint on alienation

/ Concurrent or Common Ownership

A deed prohibiting joint tenants from suing for partition or converting their joint tenancy interest into a tenancy in common without the consent of the other owners was an invalid restraint on alienation and unenforceable. Mindock v DuMars, 2022 WL 1410017, 2022 US App LEXIS 12044 (10th Cir 2022). The court did not accept the argument that the restraint was reasonable as a means to keep ownership of the home in the family when the joint tenants were all the grandchildren of the grantor.

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Broker remarks to prospective tenant that landlord might object to housing voucher approval process violate state law that prohibits statements that indicate a preference to refuse to rent to such tenants

/ Antidiscrimination Law

The Supreme Court of Connecticut has held that it violates state statutes that prohibit discrimination against housing voucher recipients to indicate a preference not to rent to tenants whose rental payments are subsidized by government. Lopez v. William Raveis Real Est. Inc., 272 A.3d 150 (Conn. 2022). While there was no statement of an intent to discriminate, the state law does not require proof of intent; rather it prohibits making any statement that indicates a preference not to rent to someone because of their “source of income.” Conn. Stat. §46a-64c(a)(3).

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Fair Housing Act claim available for racial harassment by one owner against another but no claim against the homeowners association itself even though the harassers were president of the HOA

/ Antidiscrimination Law, Fair Housing Act

When an African American couple bought property and were subject to taunts and told they were unwelcome by other owners, they had claims against those owners under the Fair Housing Act both by “making housing unavailable” under 42 U.S.C. §3604(a), and “interfering” with others in the “enjoyment of… right[s] granted by [the Fair Housing Act].” Watters v. Homeowners’ Ass’n at the Preserve at Bridgewater, 48 F.4th779 (7th Cir. 2022). However, even though the harassers were the president and former president of the homeowners’ association, the association itself was not liable despite its failure to intervene to stop the harassment.

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City repeal of gas drilling permits held to be a Lucas taking

/ Takings

A Texas court has ruled that a city ordinance prohibiting all drilling of gas wells in the city took the property of a company that had leased land for gas drilling purposes and been given permits in the past to do so. The company claimed that the denial of new permits to drill and the ordinance permanently prohibiting drilling rendered their lease without any value. The court agreed since the lease was limited to a use that was now illegal. No finding was made on whether gas drilling was a private or public nuisance that would justify prohibiting the activity without compensation — despite the fact that the citywide ban effectively declared drilling to be harmful to the public. City of Dallas v. Trinity E. Energy, LLC, 2022 WL 3030995 (Tex. Ct. App. 2022). Because the court determined that the permit denials and the prohibition on drilling rendered the lease without

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Massachusetts law denies adverse possession of property owned by the Commonwealth or its municipalities

/ Adverse Possession

When a dispute arose between the Cambridge Housing Authority and its neighbors over the location of a fence, the Massachusetts Land Court applied a statute that denies adverse possession of government-owned property, Mass. Gen. Laws ch. 260, §31, when that property is held for public purposes. Some other states have done away with sovereign immunity from adverse possession claims but this case reminds us that some states have the older immunity rule. Vasquez v. Cambridge Hous. Auth., 2022 WL 3331567 (Mass. Land Ct. 2022). In this case, the trespassory invasion was a fence rather than a building and the court ordered the fence removed or moved to the proper boundary so it no longer encroached on government land.

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Short-term rentals do not violate “residential use only” covenant

/ Concurrent or Common Ownership, Condominiums and Homeowners Associations, Leaseholds, Real Estate Transactions, Servitudes

The Mississippi Supreme Court has held that short term rental of property is not a commercial use that would violate a covenant limiting land to residential purposes. Lake Serene Prop. Owners Ass’n v. Esplin, 334 So.3d 1139 (Miss. 2022). There has been some disagreement among state courts on this question because the use of property as an Airbnb or other short term rental can be viewed as changing property to “hotel” use, at least when the owner does not share occupancy with the guest.

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100 year fixed-price option to purchase land is an invalid and unreasonable restraint on alienation

/ Estates and Future Interests, Real Estate Transactions, Servitudes

A Texas court has held that an option to purchase an interest in land for a fixed price of $50,000 that would last for 100 years was an invalid and unreasonable restraint on alienation of land. Tiner v. Johnson, 2022 WL 2062478 (Tex. Ct. App. 2022). The court could have held it to be void under the traditional rule against perpetuities. Although Texas statutes have reformed the rule against perpetuities, the court found that none of those reforms applied in this case. The case is a useful reminder that the common law rule against unreasonable restraints on alienation is an independent limit on interests that may vest too far into the future and which might have the effect of inhibiting sale of land. The way to avoid the rule is to place a reasonable time limit on them and/or make the sale price equal to fair market value at the time the

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