FINAL EXAM - Case Examples, REE Law Exam 3

Tillie Ganser entered into a contract with her four children whereby Tillie agreed to convey a specified tract of land to each child on the payment by each child of a specified sum. It was agreed that an escrow would be used to handle the transaction. Tillie deposited four valid deeds with the escrow agent, but before any of the children paid the agent the amount due under contract, Tillie died. Tillie's executor seeks to set aside the land sales as mere offers revoked by Tillie's death. Will the executor be able to set aside the contracts for the sale of the land? Ganser v. Zimmerman --------------------------------------------------------------------------- Would the following fact pattern present a different result? Tillie deposited four valid deeds, executed in the names of each of her four children, with her attorney, accompanied by instructions to convey the deeds to her children when all contracts for the sale of the property were negotiated. Before any contracts could be negotiated, Tillie died. Merry v. County Bd. of Education

"The death of the grantor whose deed is held in escrow does NOT invalidate the escrow" the grantee is still entitled to delivery. In this case, the deeds were deposited with the escrow agent and then Tillie died. The four children are given title to their individual tract of land (because of that first delivery). "Title passage is deemed to have occurred while the grantor was living" so the executor will NOT be able to set aside the contracts for the sale of the land. ------------------------------------------------------------ On one hand, "Death of the offeror results in a termination of the offer, whether the offeree knows of the death or not" But on the other hand, "when a seller who was bound under a purchase contract to sell realty dies, the seller's representative will be required to execute a good deed conveying the property to the buyer" I can't tell by the wording of part 2 whether or not a valid purchase contract existed (between Tillie and her children). It sounds like the four valid deeds were executed, yet there were instructions to: "convey the deeds to her children when all contracts for the sale of the property were negotiated". So my guess is that there was an offer made by Tillie, which was terminated due to her death. Therefore Tillie's children have NO title to the land and the executor will be able to set aside the contracts for the sale of the land?

Sharon and Daniel Kruse resided in an apartment in Ballwin, Missouri, which Defendants owned and managed. Over the years, the Kruses suffered from numerous respiratory problems. The Kruses discovered what they believed to be mold in the apartment and they moved out. Believing that mold had caused their respiratory problems, the Kruses filed a petition against Defendants alleging negligence and other causes of action. In finding that the case should be tried, the court said: As noted, proof of causation in cases involving exposure to a toxic substance typically requires a certain degree of scientific expertise. This is because "[t]he diagnosis of disease induced by environmental factors is essentially 'a scientific undertaking' requiring proof which 'the scientific community deemed sufficient for that casual link." Brown v. Seven Trails Investors Pg. 670

...[T]he testimony of Mr. Behrmann and Dr. Hand, and the reasonable inferences drawn therefrom, establishes the requisite evidence of causation necessary to avoid summary judgement. Mr. Behrmann's testimony sufficiently demonstrates that the Kruses were exposed to a high level of mold, which was capable of producing mycotoxins. Dr. Hand opined to a reasonable degree of medical certainty that the Kruses' exposure to this high level of mold contributed to and worsened their respiratory problems. Based on his observations in the course of the Kruses' treatment and review of their medical records, Dr. Hand concluded that these effects were consistent with the Kruses' exposure to harmful mold given that both Daniel's and Sharon's medical conditions improved after vacating the apartment.

Edlyn associates proposed to build 80 homes on a 100-acre parcel it owned in Easton. The Easton planning board informed Edlyn associates that 60 acres were regulated wetlands and could NOT be developed for residential structures. Edlyn associates sued the planning board contending that the regulation obliterated the entire value of the 60 acres of wetland because it could not build on them. Pg. 610

A court would rule that in assessing the value of the land in a regulatory takings case, it would examine the parcel as a whole (100 acres). Because Edlyn associates had 40 acres that it could develop, there was "no permanent obliteration" of the value of the parcel. If the court were so inclined, it might try to ascertain whether the 60 acres of wetland retained some economic value.

On April 26, 1984, Garrett Tire Center obtained a judgment against Robert. •Garrett Tire was unable to collect on the judgment as no assets could be found. •In 1984, Farmers and Merchants Bank made a purchase money mortgage loan to Robert. •A purchase money mortgage was filed on January 30, 1985, five minutes after the deed to Robert was filed. •In October 1986, Farmers and Merchants Bank filed for foreclosure on its purchase money mortgage. •Garrett Tire intervened, claiming that its judgment lien was superior to the bank's mortgage. •How would the court rule? **** Pg. 530 Slide 111

Affirmed - Pg. 531

Jake owns 50 acres of farmland that has been on the market for two years, listed at $100,000. •Lance wants to buy the land but is unable to obtain financing from a lending institution. •Jake and Lance enter into a land installment contract whereby Lance pays a downpayment of $10,000 and agrees to pay the remaining $90,000 over nine years at 9% interest. •Jake executes the deed in favor of Lance and deposits it with Fidelity Trust Co., an escrow agent that is directed by the terms of the escrow agreement to deliver the deed to Lance upon receiving receipts showing that the purchase price has been paid in full. •Jake does not have control over the deed as long as Lance does not default on the terms of the installment contract. •If Lance makes timely payments for all nine years, can Jake order Fidelity Trust to return the deed to him (Jake) instead of Lance? •What buyer risks are there with a deed of trust? Pg. 516 Slide 93 Been Corp v. Shader

After 9 years of timely payment, Lane is entitled to the deed.

At closing, Fred Thomas (seller) is unable to produce any paid receipts for water bills for the last year. Frank Hander, purchaser, is wary of closing without an assurance that any unpaid bills will be borne by the seller. An escrow account is set up with $400 funded from the purchase price, an amount everyone agrees would be more than sufficient to pay any unpaid water bills for a year. What happens after closing? p. 483

After closing, contact with the water company reveals an unpaid water bill of $90. The escrow agent will pay the amount out of the escrow funds and send the remaining $310 to the seller.

Norma Livingston sells real property to Howard Kessler on a land installment contract for $120,000, payable $20,000 down and $5,000 principal annually thereafter, plus 10% interest for 20 years. Pg. 562

After five years, Livingston desires to borrow money and gives a mortgage in the property to the Second National Bank as security for the loan. Livingston may mortgage the property up to $75,000 the balance due on the installment contract.

Oscar Fong defaulted on a loan from Portland trust. The loan was secured by a mortgage on real estate owned by Fong. At the time of default, the outstanding indebtedness was $575,000. The mortgage was foreclosed and the property ordered sold. The selling price at the foreclosure sale was $570,000. Pg. 525

After this amount was credited, the bank commenced a personal action against Fong to collect the additional $5,000 plus all expenses.

Barry sells property to Sheila for $100,000, payable $25,000 down with the remainder to be paid over 15 years at payments reducing the principal $5,000 a year. •Barry had previously purchased the property for $75,000. His gross profit is $25,000 ($100,000 contract price - $75,000 original purchase price). •Sheila pays the $25,000 down payment. •The proportion of the gross profit to the total contract price is 25% (25,000 ÷ 100,000 = 25%). •Barry, by electing the installment method, needs to report as income in the year of sale only $6,250 (25% of $25,000 down payment) and $1,250 in each succeeding year (25% of $5,000). Pg. 566 Slide 146

Barry, by electing the installment method, needs to report as income in the year of sale only $6,250 (25% of $25,000 down payment) and $1,250 in each succeeding year (25% of $5,000).

Kevin, who is afflicted with a serious kidney disorder, deposits a deed with an escrow agent before entering the hospital for surgery. •Kevin instructs the depositary to deliver the deed to his sister "in the event I do not survive the operation; otherwise, I will pick it up after I am released from the hospital." •Did Kevin provide full legal delivery to the escrow agent? Gilmer v. Anderson Pg. 495 Slide 71

Because Kevin did NOT relinquish full control over the document, there was NO legal delivery to the escrow agent.

As security for a $50,000 loan, Naomi Tilson executed a mortgage to the Pike County National Bank. After making two payments on the loan she defaulted. At the time of her default, the market value of the property was slightly in excess of $50,000. Pg. 527

Because Naomi and her family were valued customers, the bank offered to accept a deed to the property instead of foreclosing. After discussing the consequences of this action with her attorney, Naomi agreed to convey the property to the bank.

Pevorus, a single person, owned a large house with an attached casita. He lived on the first floor of the house and rented the second floor to Nowery. He also rented the attached casita to Farley. After giving proper notice, Nowery vacated the second floor at the end of the lease. Pevorus, embittered by his Vietnam war experience, refuses to rent to anyone of Asian extraction. Chai, a Korean American and a prospective tenant, challenged the legality of Pevorus's discriminatory refusal to rent to him. Pg. 581

Because Pevorus has only two rental units, and assuming he does not advertise his discriminatory preferences or use a broker to find a tenant, he is exempt from the prohibitions of the federal fair housing laws in renting the second floor and the casita. He must also be aware that state fair housing laws may be more restrictive than the federal law and may not provide the same exemptions.

Barby executed a contract for the sale of a 50-acre tract of property to Selected Lands Corporation (SLC). •Shortly thereafter, she signed a deed and placed it in escrow. •Under the terms of the agreement, the escrow agent was to deliver the deed to SLC when SLC's attorney approved the closing papers. •Before the approval, Barby died. Thereafter, the attorney approved the papers. •Does the death of the grantor invalidate the deed? Fuqua v. Fuqua pg. 502 slide 83

Before the approval, Fuqua died. Thereafter, the attorney approved the papers. The court held that the death of the grantor did NOT invalidate the instrument and that, on the occurrence of the condition, the grantee was entitled to the deed. Under the doctrine of relation back, title would be deemed to pass as of the date of the first delivery.

Bowers and a number of other real estate firms in northwest Detroit conducted solicitation campaigns in northwest Detroit involving flyers, telephone calls, and door-to-door canvassing. •As part of their campaign, flyers were allegedly delivered to "Resident." •One flyer contained the legend, "We think you may want a friend for a neighbor . . . know your neighbors." •Another mailing also addressed to "Resident" purported to carry "neighborhood news." It announced that a real estate agency had just sold a house at a specific address in the recipient's neighborhood, that the named sellers had received cash, and that the recipient might receive the same service. Zuch v. Hussey, 394 F. Supp. 1028 (D. Mich. 1975). Pg. 585 Slide 169

Blockbusting •The recipients lived in changing neighborhoods. This conduct was judged to be illegal.

In April 1967, Allen entered into a land installment contract with the Susan for the purchase of real estate. •Under the terms of the contract, Susan agreed to convey the real estate to Allen after payment of $9,700 at the rate of $85 or more per month at 7% interest per annum. •The contract further provided for forfeiture in the event the purchaser failed to make timely payments. •Over a period of 7½ years, Allen paid more than $7,500 in principal and interest and built up an equity of $1,583. He also made improvements to the property, adding two bedrooms, a bathroom, and paneling. •Allen failed to make five payments in 1974 and 1975, and Susan instituted an action in forfeiture. •Would a court be likely to allow Allen to deposit the sum of the five months' payment to avoid forfeiture? Pg. 569 Slide 150 Ulander v. Allen

Court held that: "Where a purchaser under an installment contract has acquired a substantial equitable interest in the property, the court has discretion to utilize a remedy similar to that permitted in foreclosure actions.

Luke contracted with Smithtown Park, Inc., for a lot and a dwelling to be constructed by the seller. •The contract provided that Luke was to apply for a mortgage loan from lending institutions designated by Smithtown. •The mortgage was to be for $22,400, to run for 30 years, and to bear interest at the rate of 6% per annum. •A different provision of the contract provided that in the event the maximum allowable rate should change, Luke "will accept the . . . mortgage at the maximum rate which is in effect at the date of the closing of the permanent mortgage loan." •Luke applied to Nassau Savings for a mortgage loan. •On December 6, 2017, Nassau Savings advised them by letter of its approval of the loan. The letter stated that "terms of this mortgage will be at the interest rate of 6%, in accordance with the terms of your contract, for a period of 30 years." •On October 4, 2018, Luke appeared at Nassau Savings for the closing of title. •He was informed for the first time that the loan would bear interest at the rate of 7.25%. •Luke had already moved into his new house and canceled the lease on his apartment. •He was told there would be no closing unless he acceded to the higher interest rate. •To protect himself, but over his objection, he signed an assumption, release, and modification providing for the increased interest rate, and title was closed. •Luke sued, seeking a declaration that the December 6 mortgage commitment was binding. •From the text, how did the court rule in this scenario? P. 517 Slide 95

Decision - Appellate court reversed the trial court and ordered the documents reformed to comply with the terms of the letter of approval - Reversed Pg. 518

Which of the following is NOT prohibited by RESPA?

Escrow funding

Which of the following is a pre-closing procedure?

Examination of title to the property purchased, to ascertain if it is clear of liens and encumbrances

Ben entered into a contract to purchase realty from Karen. •Ben made a deposit and agreed to pay the remainder in cash at the closing. •At closing, Ben tendered a third person's certified check to Karen. •Karen requested that he cash the check, and Ben refused. •After Karen refused to tender the deed, Ben sought a return of his deposit. •Ben sued Karen for a return of his deposit - how would a court rule? Chertok v. Kassabian (p. 471) slide 27

If your contract said CASH ONLY - that is what you're OBLIGATED to do. Cash or cash equivalents my include a check or other methods Court said that Ben's tender of a certified cash was NOT payment of cash, Ben breached the contract and was NOT entitled to the deposit SPECIAL SCENARIO where contract says - "CASH ONLY" Certified check - guaranteed by a bank, although they can be forged & they can be cancelled by the person who certifies it

Hank entered into a written agreement for the sale and purchase of 864 acres of real estate with Barbara. •The purchase price was $700,000, payable $50,000 as a down payment and the remainder in installments. •Under the contract, Barbara had the option, as payments were made, to have Hank sign a warranty deed in favor of Barbara to such land as paid for based on $815 per acre. •Barbara faithfully made payments the first four years and then assigned the contract to the Jane, who made payments thereafter. •Barbara requested for Hank to execute a warranty deed conveying 83.67 acres based on the amount of principal paid to date. •Hank refused to credit any amount of the payments made by Jane because it was not paid by Barbara. •Barbara and Jane sued Hank. How would a court rule? Pg. 562 Slide 139

Illinois Appellate court: [W]hen a valid assignment is executed, the assignee (1) acquires all of the interest of the assignor in the property that is transferred and (2) stands in the shoes of the assignor... [We] find that the money paid by the Hesses under the contract is to be credited to the Bells as payment under the contract

Anders Plumbing Inc. owned a valuable building. The company needed money and desired to sell stock to Lance and Jean Billingham. To induce the Billinghams to purchase the stock, they were given a mortgage on the property. Lee Sickles, a contractor, made improvements on the property. When he was not paid, Sickles attempted to enforce a mechanics' lien. The Billinghams argued that their mortgage had priority over the lien. Was the mortgage ruled VALID? Pg. 512

In a suit by Sickles, the court would hold the mortgage invalid because it was NOT given as security for a debt

Established in 1969, Playa de Serrano's declaration provided that each purchaser is to receive a deed to an individual town house. The declaration further provides that an association will own and control the common areas, and it states that it shall be "an adult town house development". Wilson and his mother purchased a town house in the Playa de Serrano community. Thereafter, she transferred her interest to her son. Subsenquently, in 2002, the owners passed an amendment to the bylaws declaring that Playa de Serrano is an "age-restricted community." The management then interviewed the interest holders to determine whether they were age 55 or older. Wilson sued, seeking a declaration that the age restriction was invalid. The trial court ruled against him, and he appealed. Pg. 591

In reversing the decision, the appellate court noted: The declaration does NOT expressly restrict occupancy to persons 55 years of age or older. Nor does it expressly grant the Board the power to impose such a restriction Wilson v. Playa de Serrano

Anna entered into a land contract with Auto Acceptance for the sale of her premises. •Two days later, Auto Acceptance assigned its interest in the land contract to Interstate. •Interstate then executed a quitclaim deed in favor of Joe and delivered it to Auto Acceptance with an attached letter stating that "the deed would be held in trust by Auto Acceptance until Joe paid off certain debts owed to Auto Acceptance." •The land contract was fulfilled, and Anna conveyed the property to Auto Acceptance, which conveyed it to Interstate. •Joe's creditors claimed that Joe was the owner of the property. •Would a court agree with Joe's creditors? West Federal S&L Association v. Interstate Investment P. 494 Slide 69

Joe's creditors claimed that Joe was the owner of the property. The court disagreed and stated as part of its rationale that the escrow of a deed to real estate must be accomplished by an agreement that satisfies the statute of frauds and that the letter attached to the deed was insufficient for that purpose.

Mark contracted to sell property to Linda for $49,000. •The property was encumbered with a $40,000 mortgage. •The contract did not mention the existing mortgage because Linda anticipated financing without it. •This financing did not materialize, and the salesperson for the seller suggested that Linda merely purchase the equity. •Linda agreed. •Linda never talked with the seller, and no express assumption was discussed. •At the closing, the price of the property was clearly shown as $49,000 with a $40,000 credit for the mortgage. •The deed to Linda excepted the existing mortgage. •When the debt was not paid, the mortgagee foreclosed. Not realizing enough from the sale to pay the debt, the mortgagee sued Mark, who in turn sued Linda. •How would the court rule? Pg. 549 Slide 129

Linda*? would be held personally liable, although she had NOT assumed the mortgage, if the court applied the DOCTRINE of IMPLIED ASSUMPTION

Lon Luebel, escrow agent, delivers a deed to Mike Lerman, grantee, prior to the deposit of the $170,000 purchase price, a precondition of the instructed delivery. Pg. 496

Lon is liable to Kim Sipe, the grantor, for damages because he acted contrary to the escrow instructions.

Which of the following is NOT an advantage of using an escrow in a sale of real estate?

Lower transaction costs.

Which of the following is NOT part of the seller's preparation for closing?

Obtaining financing

Jim, seller, enters into a land installment contract with Bill, buyer. •Jim is to tender a free and unencumbered deed to 20 acres of farmland designated as the Hill property, on Bill's completion of 60 monthly payments of $300 each. •At the time the contract was entered into, Jim possessed only a leasehold interest. •However, Jim later acquired the property in fee simple absolute from the lessor. •On completing the last installment payment, is Bob entitled to the deed since at the time of contracting Jim did not have clear title? Pg. 557 Slide 134

On completing the last installment payment, Hodd is entitled to the fee under the doctrine of after-acquired title.

In 1968, Patrick constructed a house on a one-acre parcel. •He conducted a plumbing repair and supply business from his residence, which was a legal use under the town regulations in existence at that time. •In 1972, the town regulations changed to prohibit the combined residential and business use. •By 1988, Patrick's business was booming, and the town ordered him to cease operations because his legal nonconforming use was now illegal because the amount of business being done had significantly increased. •Patrick sued - How would the court likely rule? Page 622 Slide 210 Gilbertie v. Zoning Board of Appeals

Patrick sued and the court found for him. The court determine that the type of non-conforming use had not materially changed, and the fact that the amount of business had increased was not an illegal expansion of the nonconforming use.

Mike executed a $75,000 mortgage to United National Bank for funds advanced to purchase a small house. •Mike planned to have a family and knew that additions would have to be made to the house. •When he explained this to the loan officer, he suggested an open-end mortgage. •A provision was included in the mortgage requiring the bank to lend them additional funds up to the original amount of the loan. •Several years later, Mike requested those additional funds. •During the intervening years, a judgment had been entered against Mike as a result of an automobile accident. •Despite this judgment, United National advanced the money. •Would United National's "additional funds" advanced after the automobile judgment have priority in case of a foreclosure? Pg. 533 Slide 113

Pg. 533

Police power

Pg. 604 (Source, Purpose, Financial Implications)

Complaints by neighbors near a site formally owned by Bell Petroleum Services. Inc., (Bell) about discolored drinking water prompted an investigation by the EPA. The investigation revealed that the aquifer from which the drinking water was drawn was contaminated by chromium, a hazardous waste. The State of Texas and the EPA cooperatively cleaned up the site and then sued Bell for response costs. Bell denies responsibility because it no longer owns the site and the because the governments did NOT prove that it was Bell's chromium waste that caused the contamination. Bell does NOT deny that it deposited chromium waste on the site. U.S. v. Bell Petroleum Services Inc.

Previous owners of a hazardous waste site are potentially responsible parties (PRP) under CERCLA. To hold a PRP liable, the plaintiff does NOT have to prove that the defendant's waste caused the release of hazardous waste from the site. They only need to show that the chromium release could have come from waste deposited by Bell; Bell must prove that it was NOT its waste.

Which of the following is NOT usually a party to an escrow transaction?

Real estate broker

Which of the following is an important postclosing procedure for the home buyer?

Recording of the deed

•Nathan, unmarried, executes a deed and deposits it in escrow. •The escrow agent is directed to deliver the deed to the buyer when the buyer secures financing and deposits the purchase price. •Before the deposit of the purchase price, Nathan marries; thereafter, the buyer deposits the purchase price. •Nathan's wife refuses to release dower interests in the property. •Is the agent required to deliver the deed free of any spousal interests of Nathan's wife? pg. 503

Regardless, the escrow agent is charged with conveying the deed to the grantee, who takes possession free of spousal interests pursuant to the doctrine of relation back.

Which of the following is NOT part of the buyer's preparation for closing?

Removing encumbrances

Lone Star entered into a contract with Miller to sell certain realty in Pueblo County, Colorado, for $588,000. •One thousand dollars was paid at the time of the agreement, and the remaining amount was to be paid at the closing on September 16, at which time Lone Star was to deliver a warranty deed and furnish a marketable title. •There was an unpaid lien on the property in the amount of $479,756.71, of which all parties were aware. •Lone Star intended to satisfy the lien out of the proceeds of the purchase price. •Miller refused to tender the purchase price, maintaining that the unsatisfied lien rendered the title to the property unmarketable. •Lone Star sued Miller for damages for breach of contract. •How would the court rule? Lone Star Development Corp. v. Miller (p. 467) slide 20

Seller is trying to back out of a deal - Court ruled in favor of Lone Star A lien should NOT be considered a failure of marketable title

Bob owns a shopping Center. •A&N Cleaners operate a dry cleaning establishment in a building on the parcel. •A floor drain in the building emptied into a dry well. •The Village of Brewster's well field was used to extract 300,000 gallons of water per day from the aquifer. •In 1982, the well field was placed on the National Priorities List due to groundwater contamination. •A study revealed A&N's dry well was a significant source of the contamination. •The United States sued Bob for costs incurred as the owner of the site causing a release of hazardous substances. •Bob argued that he was a third party who did NOT cause the release, and alternatively, that he was an innocent landowner. •How would a court rule? Pg. 661 Slide 247

Since the Berkman* Defendants' liability is predicated on their unwitting ownership of contaminated property, rather than on any disposal of waste which might have occurred on the Property since they purchased it, they bear the burden of showing that a totally unrelated third party is the sole cause of the release of hazardous substances in question. The Berkman Defendants have failed in this burden. ** See slide 248?

Susan purchased a grocery store in an area that is later zoned residential by the City. •As residential development occurs, Susan will enjoy a virtual monopoly as a grocer because residential zoning has excluded grocery competition. •Will Susan be able to expand the size of her grocery store to better reap the benefits of her "monopoly"? Pg. 622 Slide 211

Susan will NOT be able to expand her store under current zoning

What information is missing from a deed that prevents it from serving as an enforceable contract that satisfies the Statute of Frauds?

Terms of sale

First Escrow Inc. does real estate closing services for banking institutions, title insurance companies, and others. It completes preprinted forms of documents, including deeds, notes, affidavits, settelement statements, IRS 1099 forms, and property inspection certificates. All forms are prepared or approved by a licensed attorney. It does NOT make any changes to the forms without an attorney's approval. It does fill in the blanks on the forms based on the information from the real estate contract, attorneys, title insurers, lenders, and the buyer and the seller involved in the transaction. First, escrow charges a flat fee whether documents are prepared or not. A question arose as to whether this constituted the practice of law in violation of the prohibition to do so without a license. In Re First Escrow (p. 460)

The Supreme court of Missouri ruled that under the relevant statute in Missouri, it did NOT constitute the unauthorized practice of law where the closing agent completes simple, standardized forms of documents, which do not require the exercise of judgement or discretion, under rthe supervision of and as agents for a real estate broker, a mortgage lender, or a title insurer who has a direct financial interest in the transaction or a licensed attorney who represents one of the parties in the transaction.

The owner of Grand Central terminal in NY City petitioned to the New York Landmark Preservation Commission to build a 55-story office building above it. The commission rejected its request. NY City laws did provide owners of landmark sites additional opportunities to transfer development rights to adjacent parcels on the same city block. Because the terminal owner was NOT permitted to fully develop the historical site, the owner was entitled to exceed zoning limits on the development of other parcels of land. Pg. 645

The U.S. Supreme Court decided that NY City's laws did NOT prevent the owner from realizing a reasonable return on its investment. However compensation satisfied by conferring the TDRs. It only stated that the TDRs mitigated the impact of the historical landmark preservation regulation. Penn Central Transportation Co. v. NY City

Teal executed several mortgages to Walker on farmland and property in Portland, Oregon. The mortgages contained provisions allowing Teal to refrain possession of the land but permitting Walker to take possession on default. When Teal defaulted, Walker demanded possession of the properties. Teal refused to yield possession, collecting earnings from the property until ousted from possession by a foreclosure sale. As the proceeds of the sale fell short of paying the debt, Walker sued for the rents collected after Teal's refusal to surrender possession. What did the court decide?? Pg. 519 Slide 98

The U.S. supreme court determined that the mortgagee was entitled to rents and profits only if actually in possession.

Teleprompter placed a one-foot-wide cable television box on the rooftop of a building owned by Loretto. The cable tv company obtained the authority to do this from a state law permitting the placing of cable boxes and wires on private land. Loretto challenged the law as an unconstitutional regulatory taking of a part of her land. Loretto v. Teleprompter pg. 607

The U.S. supreme court ruled for Loretto, stating that a "permanent physical occupation authorized by government is a taking without regard to the public interest it may serve." It is noteworthy that the rule applies only to permanent physcial occupations; it is a per se rule, however, applying regardless of the extent of the public interest served by the state law or the slight degree of economic injury to the landowner.

Hal Zenick owned a home encumbered with a $385,000 mortgage at 7% interest. The mortgage was held by the Harper Hill S&L association (Harper Hill). Hal, who had transferred the property for $398,000, had lived there for about a year when he was transferred and forced to sell. During the year, interest rates rose considerably in Hal's area, and the broker with whom he listed the property suggested that Hal might sell his home more quickly and for a better price if the mortgage were retained. Pg. 546

The buyer would NOT have to finance at the higher interest rates and might save in other ways.

Which of the following statements is TRUE in a real estate escrow transaction?

The contract for the sale of real estate must be evidenced by a writing, but the escrow agreement need not be reduced to writing.

Frank entered into a land contract whereby Sam agreed to purchase a one-half acre tract of land from Frank. •The purchase price was $1,200, payable $200 down with the remainder payable in installments of $47.50 per month. •Paragraph 7 of the contract provided that the "buyers may not assign their rights hereunder in whole or in part." •Later, Sam entered into an agreement with Miles Homes to purchase a precut home for erection on the tract for $6,378. •Sam made a down payment and signed a promissory note for the balance due. •The note was secured by a mortgage on the tract of land purchased. •Miles Homes delivered the materials to the site in accord with the contract. •Sam made payments to Frank but defaulted after the death of his wife. •Sam also defaulted on his obligation to pay Miles Homes. •Frank canceled the contract with the consent of Sam, reacquired possession of the land, and sought a judicial order determining that the Miles Homes' lien was invalid. How would a court rule? Pg. 563 Slide 142 Fincher v. Miles Homes

The court concluded that the prohibition against assignment did NOT prohibit the Staceys from entering into a valid mortgage and that the Finchers owned the property subject to the Miles Homes' lien.

The Lukes, a white couple, purchased a home in a predominantly black neighborhood. •When financing was denied by the Oakley Building and Loan Company, the Lukes sued. •They argued that the defendant had redlined areas in the community in which minority group families were concentrated. •The defendant moved for summary judgment. Pg. 585 Slide 170

The court denied the motion. In denying the motion, the court stated that "although not altogether unambiguous, we read this [Sec. 3604 and 3605 of the Civil Rights Act of 1968] as an explicit prohibition of 'redlining.'"

The Maple Ridge Construction Company and Kasten entered in to an agreement for the purchase of lots in a subdivision owned by Kasten. Maple Ridge encountered problems obtaining financing and requested postponement of the settlement date. Kasten agreed to an extension of four months. Maple Ridge continued to try to obtain a suitable financing arrangement without success. Repeated requests for additional extensions were tuned down by Kasten. The settlement date passed with neither party preforming or demanding performance from the other. Five days after the expiration of the settlement date, Maple Ridge informed Kasten that it was ready to perform. Kasten refused Maple Ridge's tender, claiming that the contract had expired. Maple Ridge commenced an action in specific performance against Kasten in an attempt to force Kasten to comply with the terms of their contract. Who wins? Kasten Construction Co. Inc. v. Maple Ridge Construction Co. Inc. (pg. 485)

The court held that Maple Ridge Co. had a right to specific performance of the contract. Although Kasten had refused further extensions of the settlement date, Maple Ridge Co. had tendered performance according to the contract terms within a reasonable time after the extended settlement date. Also the court found that the contract did NOT provide that "time was of the essence" and Kasten did NOT act as if time were of the essence. In a case for specific performance: intention of the parties is always the controlling factor. According to the facts, the court determined that the fixed settlement date was NOT a "condition requiring strict and punctual compliance in order to entitle the buyer to specific performance." "the general rule is that time is NOT of the essence of the contract of sale and purchase of land unless a contrary purpose is disclosed by its terms or is indicated by the circumstances and object of its execution and the conduct of the parties."

In 1971 Sellmer, the seller, entered into an installment contract with Dolandson, the buyer, for the purchase of a summer cottage on the Ohio River. The purchase price was $16,500 at the rate of 8% per annum for 10 years. The contract called for a $2,000 down payment, and the monthly payments were $175. Donaldson, on several occasions, failed to make timely payments and failed to make three monthly installments in 1973. Donaldson failed to keep the property insured, contrary to a provision in an installment contract to do so. Additionally, Donaldson failed to keep the property in repair and left the property in an uninhabitable condition. Sellmer sued Donaldson, seeking a forfeiture and termination of the contract. Pg. 568

The court held that because "Donaldson had wholly failed to perform his obligation to acquire adequate insurance and had allowed the property to deteriorate to such an extent that substantial repair was necessary before the house would even be habitable," forfeiture was a proper remedy. Consequently, the court ordered that more than $7,000 in payments made by Donaldson be forfeited to Sellmer and that the contract be terminated.

The Town of Hampstead's zoning ordinance prohibits residential buildings higher than 1½ stories. •The purpose of the regulation is to retain the view of and from the lake and to maintain the beauty and countrified atmosphere of the town. •Alexander applied for a variance to put an additional full story on his one-story home. •His variance application was denied by the town, and he sued to overturn the denial. •How would the court most likely rule? Pg. 626 Slide 215 Alexander v. Town of Hampstead

The court held that the denial of the variance was based on protecting the lake view and was therefore not arbitrary. It went on to state that to obtain a variance, the applicant must prove the following: (1) no reduction in the value of surrounding properties would be suffered, (2) granting the permit would benefit the public interest (3) denial of the variance would create unnecessary hardship for the applicant (4) granting the permit would do substantial justice and (5) the use must not be contrary to the spirit of the ordinance.

Fredrick defaulted on an installment of his $80,000 mortgage loan. The Mortgagee, Northwest bank, brought a foreclosure action and notified Fredrick of its option to accelerate the entire debt. The notice stated that if Fredrick paid the amount past due plus interest, he could cure the default. Fredrick made NO payment within the 30-day period. However, during the trial, he proffered payment of the delinquent installments plus interest. Northwest refused to accept the amount, and Fredrick moved to dismiss. Decision? Pg. 522 Slide 103 Bank v. Fredrick

The court refused to do so, holding that the notification of acceleration matured the entire debt, which was no longer payable in installments.

Union Market National Bank held a $9,800 mortgage on property owned by Missak Derderian. The mortgage was in default, and the bank advertised a sale under a power included in the mortgage. The advertisement stated, in addition to a $500 cash down payment at the time of sale, "other terms to be announced at the sale" At the sale, the auctioneer announced a $500 deposit would be required of anyone prior to that person's bid being accepted. This was a very unusual condition, and Derderian's brother, who was planning to bid, refused to comply. The auctioneer, as a result, refused to accept his high bid of more than $10,000 and sold the property to the mortgagee for $8,500. All parties at the sale knew that Derderian's brother was financially responsible. When Derderian challenged the sale as improperly conducted, an appellate court agreed with him. Pg. 526 Union National Bank v. Derderian

The court stated that: "[a] mortgagee with the power to select the methods of sale must act as a reasonably prudent man would to obtain a fair price... If the conditions announced at the sale.... operate to prevent free bidding, it is the mortgagee's duty to change them."

McCormick owned 39 acres of land on Oseetah Lake in the Adirondack Mountains. McCormick applied to the Adirondack Park Agency (APA) for a permit to develop 32 lots on the tract. The APA granted the permit subject to a restriction against placing any boat houses on the shoreline of the lake. The sole basis for the restriction was that boat houses on the shoreline of the lake. The sole basis for the restriction was that boat houses would interfere with the rustic or aesthetic quality of the area. McCormick protested the restriction in court. Matter of McCormick v. Lawrence Pg. 646

The court upheld the APA decision, affirming a previous position that aesthetics alone could substantiate a zoning regulation. The court noted that a "regulation" in the name of aesthetics must bear substantially on the economic, social, and cultural patterns of the community or district.

Unlimited, Inc., applied for a building permit to construct a convenience store. Kitsap County granted a permit subject to two conditions: that Unlimited (1) provide an easement to owners of nearby commercially zoned property to facilitate the development of their land; and (2) dedicate, or give to the county, contending that the conditions affected a taking of their property without just compensation. (pg. 616) ****

The courts have long enunciated a rule favoring limiting encumbrances on the transfer of land. Since restrictive covenants limit use of the land, they tend to encumber the free transferability of the land. Thus, courts will find reasons NOT to enforce restrictive covenants if the covenantor or changing conditions provide the court with an opportunity to do so.

John signs a deed and delivers it into escrow. •The deed is not witnessed at the time of delivery and state law requires that the grantor "acknowledge the signing of a deed to be his or her voluntary act before two witnesses." •Does the deposit of the deed meet the requirements of escrow? •Can John recall the deed from the escrow agent? pg. 493

The deposit of the deed will NOT operate aas an escrow because it lacks the appropriate attestation. The deed is subject to recall by John. ("escrow agent holding such a deed {invalid} is under an obligation to surrender it to the grantor on request.

The purchaser failed to provide evidence of fire insurance before an escrow closing, contrary to the terms of the escrow agreement. •Nonetheless, the escrow agent closed the transaction, delivering the deed to the buyer and the money to the seller. •The lender objected to the closing and sought damages. •The property did not burn. •Would a court make the escrow agent pay damages? Claussen v. First American Title Guaranty Co. pg. 496 slide 74

The lender objected to the closing and sought damages. The property did NOT burn. The California Court of Appeals, finding for the defendant, affirmed language of the trial court, which said: "The court... cannot find that the failure to comply with the written instructions resulted in any damages

How does the doctrine of relation back help avoid problems caused by liens that attach to the property between the times of the first and second deliveries in escrow transactions?

The purchaser is deemed to have taken title at the first delivery.

The Eisenbergs sought a $164,000 loan from Comfed to finance the purchase of a house being built for them. The loan was to be secured by a mortgage on the new home, and then it was to be assigned to Comfed's parent, the Bank. One provision required that the Eisenbergs pay 2 1/2% of the face value of the loan as a "mortgage organization fee". Of that amount 1/2% was to be paid to Comfed as a commission and the remainder to the Comfed branch manager and toward Comfed's overhead. The Eisenbergs sued Comfed and its parent, the Bank, contending that the provisions allocating percentages were in violation of the anti-kickback provision of the Real Estate Settlement Procedures Act. Do you agree with the Eisenbergs? (Pg. 487) Eisenberg v. Comfed Mortgage Co. Inc.

The sales commissions paid to the bank's own staff (actually the staff of the subsidiary) would NOT be considered kickbacks. "The Graham court concluded that "Congress's failure to specify the making of a mortgage loan in listing settlement services seems inexplicable unless the omission was intended." The Graham court's careful survey of legislative history also failed to uncover any clear Congressional intent to regulate the making of mortgage loans under the Act." "The Court is not unmindful of the fact that the Graham decision was made in the criminal context. That case involved a clear scheme of business referral in exchange for kickbacks, and the defendants were charged criminally under the Act." Defendants' motion 4 summary judgment is GRANTED

ABC Savings and Loan has an agreement with Alfred Hillman, attorney, whereby for every person ABC refers to Hillman for legal services in connection with real estate transactions, Hillman pays ABC 10% of the fees generated. Is this legal?? p. 482 - Slide 55

This is an illegal kickback under RESPA. In addition, Hillman would be violating the attorney's code of ethics and would be subject to disciplinary measures.

Tod sold Randomacre to Susan on land contract. •Susan mortgaged the property, and when she defaulted, she owed $40,000 on the land contract and $20,000 on the mortgage. •The property was foreclosed and sold at public auction for $70,000. •How would the proceeds be distributed? Todd? Mortgagee?Susan? Pg. 564 Slide 143

Toble $40,000 Mortgagee $20,000 Hillside $10,000 -------- --------- Total $70,000

Mr. and Mrs. Hoyle, under an installment contract for the purchase of a motel, make total installment payments of $120,000 on a $345,000 purchase price. Additionally, they expend $30,000 on repairs and improvements to the premises. After 4 years, the Hoyles default on their installment payments and vacate the premises. The reasonable rental value of the motel is $30,000 per year. Pg. 570

Under an equitable approach, because the $150,000 expenditure on payments and improvements is substantial, the buyer is entitled to restitution in the amount $30,000. The reasonable rental value of the property is $300,000 x 4 years (the period of time in which the Hoyles occupied the premises), or $120,000. The difference between the total payments and the reasonable rental value is $30,000 payable to the Hoyles.

Rachel assembles a four-by-six-foot metal shed on her property to store her lawnmower and garden tools. •Although the building is prohibited (without permission) by the restrictive covenant in Rachel's deed, it is common in her subdivision to own these sheds; in other words, everyone ignores the covenant. •The courts may not enforce the restrictive covenant on request by a neighbor because the homeowners have acquiesced in this noncompliance. •However, there are instances where Rachel will clearly be subject to the restrictive covenant and probably to a building code. Pg. 602 Slide 192

When Rachel decides to build a second house on her lot, the covenant is violated and a building permit is required. The building inspector, to offer some measure of protection to other residents, oversees her plants. The building code, rather than the restrictive covenant, will probably become the enforcement mechanism

Whitehouse desires to pull out $25,000 of equity from his residence. He currently has a 4% loan. The current market rates are 6%. Financial Services is willing to extend a second mortgage for the new amount of $25,000 by assuming the existing mortgage and charging 5% interest on the combined loan. Pg. 533

Whitehouse is better off taking his option instead of refinancing the whole loan at 6%. Financial services will service the old loan and in effect receive an additional 1% of interest for doing that while extending the additional $25,000 loan at 1% less than market interest.

Able, Baker, and Charlie purchased a farm for investment. They took title as TENANTS IN COMMON. Part of the purchase price was secured by a purchase money mortgage on the property, the mortgage and note were signed by Able, Baker but NOT Charlie. When the parties defaulted, the seller joined the three in a foreclose action. Charlie defended on the grounds that she did NOT sign the mortgage and note. Would she be successful? (pg. 550)

Yes she would, because Charlie did NOT sign the note, she has NO personal obligation to pay the debt secured by the mortgage. (UNDIVIDED interest with no right of survivorship, when one of the cotenants dies, the interest passes to his or her heirs or beneficiaries and not to the surviving tenants)

Ray wished to go into business for himself as a plumbing and heating contractor. •He planned to hire one or two employees and open up a small showroom from which to sell plumbing fixtures. •Although Ray had saved enough money to get started, he was advised by some of the manufacturers whose lines he wished to carry that he should have a line of credit with a local bank. •ABC Bank was willing to give Ray a $65,000 line of credit, and as security, the bank asked for a mortgage against rental property that Ray owned. •Does ABC Bank have a valid mortgage against the rental property since the line of credit was for Ray's plumbing business? Pg. 513 Slide 88

Yes this is a valid mortgage - Mortgages may apply to rental income, life estates, estates for years, remainders, reversions, as well as other property rights. Mortgages are also used sometimes to secure obligations that are quite unrelated to the property mortgaged.

Rocky owns a five-acre tract of land in Florida and is interested in selling his land and moving to Colorado. •Johnny owns a five-acre tract of land in Colorado and is interested in moving to Florida. •A real estate broker brings the two together, and they agree to an even exchange of property. •Rocky deposits his deed to the Florida property with Jerry, a third party, on condition that the Florida deed be delivered to Johnny on receipt of the deed to the Colorado property. •When Johnny deposits the deed to the Colorado property, Jerry will deliver it to Rocky and deliver the deed to the Florida property to Johnny. •Is this a valid escrow transaction? Morris v. Davis pg. 492 slide 61

Yes, the objective of the escor transaction is to ensure that the buyer is invested with marketable title to the property and the seller receives the purchase price. The use of the escrow device in closing sales of real estate enjoys the advantages of convenience and protection against a party's change of mind.

Jane, a resident of California, owns farmland in Kentucky that she wants to sell. •Sam, a resident of Kentucky, desires to buy the farmland. •The cost of Jane's appearance at a closing in Kentucky is prohibitive. •The parties enter into a purchase contract for the sale of the farmland and agree to close in escrow. •Jane mails a fully executed deed for her Kentucky farm to Kentucky Loan & Trust Co., which is instructed to deliver the deed to Sam on receipt of the purchase price. •When Sam delivers the purchase price, Kentucky Loan & Trust, as previously instructed, delivers the deed to Sam. •Is this a valid type of escrow closing? Pg. 492 Slide 64

Yes, with the use of the escrow closing device, the closing is less likely to fail because an independent third party is charged with carrying out mechanical details of the transaction! (Sometimes it is simply INCONVENIENT for parties to be at closing)

Tom Hildebrant purchased a four-unit rental property for $375,000. River National Bank lent him $355,000 to complete the purchase. The loan was secured by a mortgage on the property. Because of a a severe recession in the area caused by the closing of several steel mills, Hildebrant was unable to consistently rent all the units and he defaulted on the debt. As a result, the bank foreclosed. At the foreclosure sale, the property sold for $345,000. Does Tom have any liability on the unpaid portion of the debt? (pg. 550)

Yes. Tom is liable for the difference between the amount for which the property was sold at the foreclosure sale ($145.00 less expenses of the sale) and any amount still remaining on the debt.

The escrow closing is

a modification of a conventional closing, with a third party acting as an intermediary.

At the closing, the lending institution that loans money to a buyer usually will require the buyer to sign

a promissory note and the mortgage.

Escrow closing can avoid problems that may arise should marriage intercede between the time of execution of the purchase contract and the delivery of the deed to a grantee by

allowing the escrow agent to deliver a deed deposited in escrow upon fulfillment of the conditions contained in the agreement.

When the deed is tendered at the closing, the buyer should

carefully check to make sure the deed's specifications are in accord with the contract.

One common responsibility of the settlement clerk at closing is to

collect one check from the purchaser and write payment checks.

The attorney's role in the closing

consists largely of preparation for the closing by examination of the documents.

The authority of the escrow agent is

derived from the escrow agreement.

If the escrow agent is authorized to commingle escrow funds with personal funds in a bank account, the total amount of funds must

equal or exceed the amount of the escrow funds.

The listing broker's role in the preparation of the closing is normally one of

facilitating the closing by communicating with the parties.

It is FALSE that the Real Estate Settlement Procedures Act (RESPA)

is applicable to residential and non-residential real estate.

For delivery of a deed to occur,

it must be beyond the legal power of the grantor to retrieve.

The loan estimate disclosure

must include how long the interest rate will be effective.

It is advisable that the settlement clerk be a

notary public.

A closing disclosure form typically includes all of the following EXCEPT

seller's income tax withholding.

A practical alternative to foreclosure is

short sale.

The escrow closing in a real estate transaction is complete when

the escrow agent delivers the deed to the purchaser and the purchase price to the seller.

In an escrow closing, if a party tries to back out of the transaction after the deed is deposited with the escrow agent

the escrow agent will nonetheless deliver the deed to the purchaser upon the happening of the conditions specified in the agreement.

If an escrow agent embezzles escrow funds

the seller will bear the loss if the conditions under which the purchase money was to be held in escrow were performed.

If the title search or inspection of the premises reveals an objectionable lien or other encumbrance

the seller will ordinarily have an opportunity to remove it.

Bob, as the original grantee of a subdivided parcel, covenanted in the deed to accept and pay for a seasonal water supply provided by the original grantor. •Eagle Enterprises, the successor to the original grantor, sued Gross, the successor to the grantee Bob, to enforce the restrictive covenant relating to the supplying of water. •Eagle Enterprises argues that the covenant attaches, or runs with the land, thereby binding all subsequent owners to pay for supplying the water. •Gross responds that the covenant bound only Bob and did not run with the land. •The court held that a restrictive covenant will run with the land if it meets three conditions: -(1) the original parties must intend that it run with the land, -(2) there must be privity of estate between the parties, and -(3) the covenant must touch and concern the land. Pg. 601 Slide 189

•Although the court found that this particular covenant was personal and did not "touch and concern" the land, any covenant that meets the threefold test will be held to run with the land. Eagle Enterprises, Inc. v. Gross, 39 N.Y.2d 505, 349 N.E.2d 816 (1976).

Isabel Luna attempted to rent an apartment from New Cambridge Apartments. •New Cambridge informed Luna that because the apartment she was interested in would require her children of the opposite sex to share a room, it was not available. •New Cambridge had a policy of requiring children of the opposite sex to sleep in separate bedrooms. •During a subsequent investigation, it was also revealed that New Cambridge had a policy banning children from living on the fourth floor of the apartment complex. Pg. 590 Slide 179

•Both policies were found to constitute familial status discrimination, and New Cambridge was ordered to pay Luna $15,000.

Fleming, a prospective tenant, visited a property owned by Fredricy. •While showing the rental property to Fleming, Fredricy stated that her children would be prohibited from playing outside in the front yard. •Fleming filed a complaint. After conciliation failed, Fleming opted to sue Fredricy in federal court claiming that the remark was familial status discrimination. Pg. 590 Slide 180

•In June 2003, the federal court found that the policy prohibiting the children from playing in the front yard was discrimination and awarded $23,064 in damages.

In Agins v. City of Tiburon, the U.S. Supreme Court seemed less concerned than Pennsylvania and New Jersey about the potential disadvantages to large-lot zoning. Slide 224 Pg. 631

•It held that a regulation that limited an owner to as few as one house on a five-acre lot was legal. •The court stated that where a regulation promoted a police power purpose and did NOT deny the owner all reasonable economic use, no regulatory taking occurred.

William, a white, refused to sell his house to a black couple (Hanks). Instead, William leased the house to a white couple. •The Hanks filed a complaint with HUD. •The ALJ found for the Hanks, granting them $40,000 in actual damages and granting $20,000 to the white couple who leased the house for their embarrassment and economic loss; he also assessed a civil penalty of $10,000 against William. Pg. 593 Slide 183

•The Eleventh Circuit upheld the ALJ on all the relief granted. This is the first case decided by an ALJ under the 1988 Fair Housing Amendments act enforcement procedures. Notice the flexibility the ALJ has in granting relief

The zoning ordinance in the Town of Concord required a minimum lot size of one acre along existing roads and three acres on the interior. •Kit-Mar Builders was denied a request to rezone its property lots smaller than mandated by the code. •Kit-Mar sued Concord, contending that the large-lot zoning was an unconstitutional taking of its property. •How did the court rule in this case? How might the U.S. Supreme court rule? Pg. 630 Slide 222

•The Pennsylvania Supreme Court held that a zoning provision of this type is unconstitutional if either its purpose or its result is exclusionary. •The only exception would be where the municipality can show some extraordinary justification for requiring large lots. •An extraordinary justification would be where the natural conditions of the soil, for instance, cannot handle denser population and there is no other reasonable, nonexclusionary method of resolving the problem. •Most Pennsylvania communities would be hard-pressed to satisfy the judicial burden of proving extraordinary justification. In re Kit-Mar Builders, Inc., 439 Pa. 466, 268 A.2d 765 (1970).

The Village of Bellwood and six individuals brought suit against two real estate firms for steering black homebuyers to one area of the Village, and white homebuyers to another area. •The real estate firms argued that the Village and the individuals, who were admittedly testers and not prospective homebuyers, were not economically injured and could not sue under the Fair Housing Act. Pg. 585 Slide 171

•The U.S. Supreme Court held that the conduct of the real estate firms was illegal steering under the Fair Housing Act and that the plaintiffs' contention that they were being denied the opportunity to live in an integrated community was adequate economic injury to bring the suit.

In August 2004, the owners of a mobile home attempted to sell the home to a couple with children. •Rennels Property Management, the owner and manager of Marlin Court where the mobile home was located, informed the couple that Marlin Court was an adults-only community. •The sale fell through, and the mobile homeowners were unable to buy their intended new home. Pg. 590 Slide 178

•The court ordered Rennels Property Management to pay the mobile homeowners $32,000 because they were the indirect victims of familial status discrimination.

Susan applied to the planning and zoning commission for subdivision approval of a plan for 11 lots on a 10-acre parcel. •The parcel was zoned residential. •The commission denied subdivision approval because the development could cause off-site traffic congestion, decrease property values, and was in disharmony generally with the area. •Susan's plan was in conformity with the town's subdivision regulations. •Susan sued to reverse the commission's denial. •How did the court rule in this case? Pg. 634 Slide 229

•The court reversed the commission's denial because Susan's plan conformed to the town's subdivision regulations. •It stated that traffic congestion, decrease in property values, and area disharmony are relevant considerations in a zoning matter determining the use of the land but NOT in a subdivision matter. Sowin Associates v. Planning and Zoning Commission, 23 Conn. App. 370, 580 A.2d 91 (1990).

William filed suit to enjoin the Mills from constructing a house on a lot in the plaintiffs' neighborhood. •A restrictive covenant prohibited owners from subdividing their lots. •The lot that Mills proposed to build on was a subdivided lot. •The Mills argued that the character of the neighborhood had substantially changed over time because many of the original lots had been subdivided. Pg. 603 Slide 193

•The court stated that a restrictive covenant is unenforceable if clear and convincing evidence exists that -(1) a substantial change in the character of the neighborhood existed, -(2) enforcement of the restriction would not restore the neighborhood to its prior character, and -(3) enforcement would impose greater hardship on the Mills with minimal benefit to the William. •The court decided that the restrictive covenant in this case was unenforceable because numerous lots had been split previously, many current residents favored the splitting of this lot, and the Mills had signed a house construction contract unaware at the time that the restrictive covenant existed.