Rights of first refusal do not violate the rule against perpetuities if they must be exercised during the holder’s lifetime

/ Estates and Future Interests, Real Estate Transactions

New York retains a version of the traditional rule against perpetuities. Like most states, it has classified options to purchase and rights of first refusal as “executory interests” subject to the rule against perpetuities. They therefore must vest (if at all) within 21 years of their creation, or within 21 years of the death of a named person in the conveyance or during the lifetime of a named person. The latter was the case in Martin v. Seeley, 142 N.Y.S.3d 252 (App. Div. 2021) where the right of first refusal could be exercised only by the original holder of it. The court also resolved a conflict between language suggesting the covenant ran with the land but that it would not apply to any successors in interest by finding that the “running with the land language” was of no legal effect.

Damages awarded tenant when landlord threatens to engage in illegal self-help eviction

/ Consumer Protection, Leaseholds, Real Estate Transactions

The Maryland Supreme Court held that residential tenants can sue for damages if the landlord posts a notice telling them that they are being evicted. This constitutes a form of “nonjudicial self-help eviction” prohibited by state law, which requires landlords to use court eviction procedures to recover possession of the premises. State law would have allowed self-help eviction only if the landlord had a reasonable belief based on a reasonable inquiry that the tenants had abandoned the premises, something that did not happen in this case. Wheeling v. Selene Finance LP,2021 WL 1712318 (Md. 2021). The court found that a threat to use self-help eviction violated the statute and that this allowed a suit for damages under the state statute prohibiting self-help eviction, Md. Real Prop. art. §7-113, and a suit for emotional damages under the Maryland Consumer Protection Act, Md. Commercial Law art. §13-101 et seq.

Reverter clause requiring property to be used for church purposes not an invalid restraint on alienation

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

The Virginia Court held that a future interest requiring forfeiture of title if property was not used to church purposes was a valid possibility of reverter, and was not an invalid or unreasonable restraint on alienation of land. Canova Land & Inv. Co. v. Lynn, 856 S.E.2d 581 (Va. 2021). The court said that a liberal interpretation should be granted to deeds involving land granted for charitable purposes because limiting property to charitable uses is consistent with public policy.

Reverter clause requiring property to be used for church purposes not an invalid restraint on alienation

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

The Virginia Court held that a future interest requiring forfeiture of title if property was not used to church purposes was a valid possibility of reverter, and was not an invalid or unreasonable restraint on alienation of land. Canova Land & Inv. Co. v. Lynn, 856 S.E.2d 581 (Va. 2021). The court said that a liberal interpretation should be granted to deeds involving land granted for charitable purposes because limiting property to charitable uses is consistent with public policy.

Not a regulatory taking and no compensation due when a town acquires an easement by prescription

/ Adverse Possession, Easements

The Supreme Judicial Court of the Commonwealth of Massachusetts held that a town can acquire an easement by prescription and that, if it does, no just compensation is due because no regulatory taking has occurred. Rather, the landower failed to object by suing for trespass or to give permission so the statute of limitations for ejecting the intrusion passed and the owner’s right to exclude was limited by statute and the doctrine of easement by prescription. The town did not “take” the property; the owner lost property rights by failing to take steps required by law to preserve those rights. Gentili v. Town of Sturbridge, 140 N.E.3d 391 (Mass. 2020).

Commercial lease disclaimer of liability for negligence held to be enforceable

/ Leaseholds

A California appeals court has found a disclaimer of liability for negligence in a commercial lease to be enforceable and not to violate public policy even though a state statute made them invalid as to cases involving fraud, willful injuries, gross negligence, or violations of law. Garcia v. D/AQ Corp., 271 Cal. Rptr. 3d 861 (Ct. App. 2020). This case did not fit in those categories since the tenant hit his head on a low beam at the top of a flight of stairs and the landlord had not engaged in an intentional tort or willfully caused the injury. Since none of the statutory categories applied, and this involved a commercial lease, the court held that the parties had the freedom to agree to the disclaimer of tort liabilty and that this did not violate public policy under either the statute or the common law.

Judicial foreclosure is not “debt collection” under FDCPA

/ Mortgages

The Ninth Circuit held, in Barnes v. Routh Crabtree Olsen PC, 963 F.3d 993 (9th Cir. 2020), that judicial foreclosure is not a form of “debt collection” covered by and regulated by the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692e-g. The court relied on the Supreme Court’s decision in Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019) that a law firm that brings nonjudicial foreclosure proceedings is not a debt collected under the FDCPA.

Tenant not entitled to damages under the implied warranty of habitability for injuries from slipping on an icy driveway

/ Leaseholds

The Supreme Judicial Court of the Commonwealth of Massachusetts held, in Goreham v. Martins, 147 N.E.3d 478 (Mass. 2020), that a landlord is not liable for injuries to a tenant who slips on ice in the driveway under the implied warranty of habitability because such claims are, in effect, strict liability claims and injuries to the body in the context of landlord-tenant law are governed by the law of negligence. In this case, because the jury found the tenant to be more at fault than the landlord, there could be no recovery for negligence either under state law. The court also held that the warranty of habitability only applies to conditions inside the dwelling unit, that the landlord did not violate any provisions in the housing code, and that the tenant could have used the front entrance (rather than the rear entrance where the accident happened) and avoided injury.

Physical partition denied when the sale value significantly exceeds the value of the separate parcels despite a co-owners attachments to the land

/ Concurrent or Common Ownership

The Nebraska Supreme Court held that partition by sale is preferred to physical partition if the fair market value of the land as a whole exceeds the market value of separate parcels even if a co-owner objects to the sale because of sentimental attachments to the land. FTR Farms, Inc. v. Rist Farms, Inc., 942 N.W.2d 204 (Neb. 2020). A somewhat similar case came out the opposite way in Ark Land Co. v. Harper, 599 S.E.2d 754 (W.Va. 2004)

Scroll to Top