Real Estate Transactions

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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Real estate sellers cannot change their minds once a contract is signed

The Massachusetts Land Court has reaffirmed a traditional rule of law that parties to a real estate contract involving the sale of land have the right to demand specific performance. In this case, that meant that, once a land sales contract is signed by both parties, the buyer is entitled to a judgment ordering the seller to go through with the sale; the seller has no right to change their mind and refuse to sell. The court noted that this rule applies equally to buyers and sellers. Niziak v. Daniels, 2021 WL 6013961, at *7 (Mass. Land Ct. 2021).

Courts split on whether short term rentals are a nonresidential use

With continued disagreement among courts in the U.S., the Kentucky Supreme Court has weighed in on the side of finding short term rentals of property to be more like hotels than home ownership or residential leasing and so does not qualify as a "residential" use prohibited by a covenant that prohibits nonresidential uses of the land.. Hensley v. Gadd, 560 S.W.3d...

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Probation on discriminating against Section 8 recipients does not violate due process

The Minnesota Supreme Court has held that a state statute that prohibits landlords from refusing to rent to housing voucher (Section 8) recipients does not violate the due process or equal protection clauses of the Minnesota Constitution. Fletcher Properties, Inc. v. City of Minneapolis, 947 N.W.2d 1 (Minn. 2020). While federal law does not require landlords to rent to...

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Banks are both owners and landlords when they buy tenant-occupied property at a foreclosure sale

Banks seem to have a hard time understanding that when they obtain title to property through a foreclosure sale that they not only own the property but have taken on themselves all the obligations that an owner has. If the property is occupied by tenants, the bank-owner is automatically the new landlord and the law imposes duties on landlords. The law also requires owners not to let their property become a nuisance. But this simple legal truth is repeatedly resisted by some banks. This rule extends to any entity that is the legal owner of the property and that includes the trustee of...

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

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...

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

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...

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Bank has standing to foreclose despite inability to produce the note on which the mortgage was based

The New Jersey Supreme Court allowed a bank to foreclose on property without direct evidence that it had the right to foreclose. Ordinarily, the foreclosing entity must produce the note that memorializes the underlying debt. The UCC allows foreclosure when notes have been lost, UCC 3-309, if a “lost note affidavit” is filed with the court. In Investors Bank v. Torres, 2020 WL 3550701 (N.J. July 1, 2020), the homeowner borrowed money from one lender who filed a foreclosure action but...

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