9th Circuit rejects “equal opportunity harasser” defense

/ Fair Housing Act

When accused of sexual harassment, an employer or landlord sometimes tries to defend the claim by arguing that he treated male and female employees or tenants alike so no discrimination was involved, i.e., no one was treated differently “because of sex.” If this defense is a good one, then people could avoid liability under antidiscrimination laws by attempting to treat men in the same way they treat women and then argue that their sexual harassment of women was not “discriminatory.” This defense poses a puzzle for antidiscrimination law. Some courts suggest that any difference in treatment of men and women is sufficient to show discrimination because of sex while others suggest that each case be considered on its own and the fact that one discriminates against one person does not mean they did not also discriminate against another person because of sex. A third approach is to reject the defense …

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Vermont Supreme Court denies reserved easements implied from prior use unless they are strictly necessary

/ Easements, Real Estate Transactions, Servitudes

While owners can generally get an easement by necessity to obtain access to landlocked land over remaining lands of the grantor, most states also recognize easements implied from visible, continuous prior use before the parcels were separated if the access is helpful (“reasonably necessary”) to the dominant estate. The prior use doctrine rests on the right to reform a deed because of mutual mistake. Such easements can arise by grant (giving an easement to the grantee/buyer) or reserved by the grantor/seller. However, the Vermont Supreme Court has held in the case of Greenfield v. Luce, 2022 WL 16848175, 2022 Vt. Unpub. LEXIS 97 (Vt. Nov. 10, 2022) that it will find an easement to be reserved unless it is necessary to access a landlocked estate. Most states have a stricter test for easements by reservation because they “derogate from the grant” and the buyer should not be surprised to find that …

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Municipal prohibitions on short-term rental of property not a taking of property under the fourteenth amendment

/ Takings

Two federal courts have held that municipal ordinances that prohibit or regulate the ability of owners to rent their properties to short-term tenants did not unconstitutionally take the owners’ property rights without just compensation. Nekrilov v. City of Jersey City, 45 F.4th 662 (3d Cir. 2022); Hignell-Stark v. The City of New Orleans, 46 F.4th 317 (5th Cir. 2022)

Fourth Circuit strikes down North Carolina’s “ag-gag” law under the First Amendment

/ Free Speech, Trespass

People for the Ethical Treatment of Animals (PETA) v. N.C. Farm Bureau Federations, Inc., 2023 WL 2172219 (4thCir. 2023) In a very complicated ruling, the Fourth Circuit has struck down North Carolina’s “ag-gag” law that prohibited employees from engaging in “undercover animal-cruelty investigations and publiciz[ing] what they uncover” on the ground that it violates their First Amendment free speech rights. The North Carolina Property Protection Act (the “Act”) prohibits “intentionally gain[ing] access to the nonpublic areas of another’s premises and engag[ing] in an act that exceeds the person’s authority to enter.” N.C. Gen. Stat. §99A-2(a). The court suggests that North Carolina can achieve any legitimate goals it has in protecting private property by focusing on the interests that trespass law protects in the exclusive possession of land. Unauthorized access can be prohibited but that cannot be conditioned on regulating speech that is protected by the First Amendment. PETA challenged four provisions …

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Second Circuit upholds rent control against a takings challenge post-Cedar Point

/ Leaseholds, Takings

In one of the first important cases to gauge the consequences of the Supreme Court’s physical takings decision in Cedar Point Nursery, the Court of Appeals Second Circuit, in two linked cases has upheld recent amendments to New York City’s rent stabilization law against a claim that is a facially invalid violation of the takings clause applicable to the states through the fourteenth amendment. Community Housing Improvement Program v. City of New York, 2023 WL 1769666 (2d Cir. 2023); 74 Pinehurst LLC v. City of New York, 2023 WL 1769678 (2d Cir. 2023). The court ruled that the law, at least on its face, was neither a physical taking under the Loretto/Cedar Point line of cases nor a regulatory taking under the Penn Central line of cases. The physical taking claims were that the law (the New York City Rent Stabilization Law, as amended in 2019 in the Housing Stability and Tenant Protection Act …

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Implied warranty of workmanship & habitability in new housing cannot be waived

/ Consumer Protection, Real Estate Transactions

The Arizona Supreme Court has held in Zambrano v. M & RC. II LLC,, 517 P.3d 1168 (Ariz. 2022) that the implied warranty of workmanship and habitability in new housing cannot be disclaimed or waived. The involved a sales contract with a detailed express warranty that disclaims any obligation to comply with common law obligations under the implied warranty as defined in Arizona law. The Arizona Supreme Court held that any waiver of the implied warranty was void even if it was partial, as it was here because an express warranty existed, albeit narrower than the implied warranty. The Court refused to make an exception for sophisticated buyers (the buyer here was a licensed real estate agent) because such a rule would be hard to administer and because even sophisticated buyers need the protection of the rule which protects buyers from latent defects that the buyer could not have reasonably discovered at the time …

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Texas Supreme Court interprets life estate as a fee simple because the remainders were subject to divestment

/ Concurrent or Common Ownership, Estates and Future Interests, Real Estate Transactions, Wills and Inheritance

In Jordan v. Parker, 2022 WL 17998227 (Tex. Dec. 30, 2022), the Texas Supreme Court held that a conveyance of a life estate actually conveyed a fee simple since the remainders were subject to alteration or even complete divestment by the life estate owner. In this case, a man devised his entire estate to his widow for life with remainders in their children, but the devise gave the widow complete power to transfer both the life estate property and to redirect ownership of the remainders. Part of the estate was a fractional ownership interest in a ranch. Some years later, while the widow was still alive, a son who was a remainder owner conveyed his remainder interest to his daughters (the granddaughters of the widow and the testator). The widow never exercised her power to alter the remainders in her children during her lifetime, and the question was whether the widow …

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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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Scope of easement to operate a neighboring golf course determines whether intrusion of dozens of golf balls a year to victims’ property constitutes a trespass

/ Condominiums and Homeowners Associations, Easements, Servitudes, Trespass

A couple that bought a home next to a golf course sued the golf course for trespass because of all the golf balls that landed on their property. Although the golf course attempted to take remedial measures to stop golf balls from landing on the couple’s property, roughly 90 balls would land on the property each year, a dozen of which struck the house. The couple won in the trial court which awarded them $100,000 in compensatory damages for property damage and $3.4 million in emotional distress damages. The trial court also issued an injunction preventing play on the 15th hole under the golf club implemented additional remedial measures, such as reconfiguring the hole or installing netting. The Supreme Judicial Court of the Commonwealth of Massachusetts reversed and remanded the case to the trial court for more proceedings. Tenczar v. Indian Pond Country Club, Inc., 2022 WL 17813649, — N.E.3d — (Mass. 2022). …

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