Real Estate Transactions

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

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... Read more about Implied warranty of workmanship & habitability in new housing cannot be waived

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

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...

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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 assocation declaration

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...

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Commercial rent acceleration clause invalid if it is a "penalty"

The Massachusetts courts say that there is no duty to mitigate damages in commercial leases but they sure look like they recognize such a duty when a lease has an acceleration clause (requiring the full remaining rent for the rest of the lease to be paid if rent payments are missed). In the case of Cummings Props., LLC v. Hines, 2022 WL 17409280 (Mass. App. Ct. 2022), a commercial tenant...

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

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...

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

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.

Does an “as is” clause in a contract of sale immunize the land seller from a fraud claim?

Continuing the conflicts among state courts on this question, a Florida court chose a “yes” answer to the question of whether a seller can get away with fraud if the land sales contract contains an “as is” clause or a “merger clause” making the express terms of the written agreement the only legitimate source of obligations between the parties. ...

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Parcel is landlocked after 90 year easement ends

Most courts granted an easement by necessity when an owner severs its land and leaves a parcel without access to a public road. The easement allows passage over land that had been connected to the landlocked parcel before it became landlocked. The courts differ on whether this is a mandatory rule of law (owners are not allowed to create land to which there is no access) or a default rule based on the implied intent of the parties, in which case the...

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Recorded covenants can run with lands the grantor does not own if owners of those lands ratify the covenants

The Utah Supreme Court has held that a landowner who recorded covenants on land he did not own were potentially binding on subsequent owners of that land if they engaged in acts that ratified the covenants (for example, by making payments to the homeowners association (HOA)). WDIS, LLC, as Trustee of MDMG Trust, dated Apr. 25, 2016 v. Hi-Country...

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