Restraints on Alienation

Retroactive restraint on short term leasing by homeowners association upheld by Idaho Supreme Court

When a homeowner's association voted to amend the declaration of covenants, conditions, and restrictions to prohibit short term leasing of units (rentals for less than six months), one of the townhouse owners sued to declare the retroactive restraint on alienation invalid. However, the Idaho Supreme Court found the retroactive restraint to be valid; it neither constituted an unreasonable restraint on alienation or exceeded the scope of the powers of the association to amend the declaration retroactively....

Read more about Retroactive restraint on short term leasing by homeowners association upheld by Idaho Supreme Court

Colorado Supreme Court holds that an option that can be canceled any time before its exercise does not violate the traditional rule against perpetuities

The Colorado Supreme Court has held that the traditional rule against perpetuities does not invalid an option, even if it has no time limit, if it can be canceled at any time before its exercise, at least where the price for the option is set at the market value of the property and it was agreed to by sophisticated parties. Atlantic Richfield Co. v. Whiting Oil & Gas Corp., 320 P.3d 1179 (Colo. 2014). The court reasoned...

Read more about Colorado Supreme Court holds that an option that can be canceled any time before its exercise does not violate the traditional rule against perpetuities

Local sex offender law violates state regulatory provisions

Like other cities, the City of Lynn in Massachusetts sought to regulate where sex offenders live. It prohibited certain sex offenders from living within 1,000 feet of a school or park and defined "school" to include all public, private, and church schools. The effect of the ordinance was to prevent sex offenders from spending a night in ninety-five percent of the city, including in a shelter or half-way house designated for sex offenders. The Supreme Judicial Court struck down the local ordinance as exceeding the scope of local government powers because it was inconsistent with state...

Read more about Local sex offender law violates state regulatory provisions

District of Columbia prohibits noncompetition clause in sale of grocery store

The District of Columbia  passed legislation designed to prevent a grocery store owner from selling the property with a covenant that would have prevented the property from being used for grocery store purposes because this would deny residents in the neighborhood easy access to a grocery store. read article  The legislation is similar to the ruling of the New Jersey court in Davidson Bros, Inc. v. D. Katz & Sons, Inc...

Read more about District of Columbia prohibits noncompetition clause in sale of grocery store

New York high court exempts options to renew leases from the rule against perpetuities

The New York Court of Appeals joined the majority of states in holding that the rule against perpetuities does not apply to options to renew leases. Bleecker St. Tenants Corp. v. Bleeker Jones LLC,  945 N.E.2d 484 (N.Y. 2011). It should be noted that only a minority of states have the traditional rule against perpetuities and New York's rule is codified by statute. "No estate in property shall be valid unless it must vest, if at all, not later than twenty-one years after one or more...

Read more about New York high court exempts options to renew leases from the rule against perpetuities

Automatic reverter creates fee simple determinable

In a straightforward application of traditional doctrine, a Tennessee court ruled that a deed condition that stated that a lot "shall automatically revert to Seller in fee simple" if the buyer does not comply with stated conditions (to install a waterline within a year) creates a fee simple determinable that transfers title automatically. Lasater v. Hawkins, 2011 WL 4790971 (Tenn. Ct. App. 2011)

More states prohibit transfer fee covenants

Idaho, Indiana, Mississippi and Montana have all passed statutes prohibiting enforcement of any transfer fee covenants entered into after the dates the legislation goes into effect. See 2011 Idaho Sess. Laws 107; 2011 Ind. Acts 136; 2010 Miss. Gen. Laws 348; 2011 Mont. Laws 259. Transfer fee covenants are promises inserted in deeds to pay a fee to the original seller of the property any time it is sold in the future. Such fees were abolished in New York State in 1852 in the case of DePeyster v. Michael, 6 N.Y. 467 (1852) as a vestige of feudalism.

Co-ops accused of racial bias

Two Bronx communities organized as co-ops require references from three co-op members in order to buy units. After using testers, the Fair Housing Justice Center has filed a lawsuit arguing that this requirement has a discriminatory effect when existing co-op members are overwhelmingly white and when the requirement was not consistently applied. Read article.