Keeping Current—Property

Keeping Current—Property

Keeping Current—Property Editor: Prof. Shelby D. Green, Elisabeth Haub School of Law at Pace University, White Plains, NY 10603, sgreen@law.pace.edu. Contributor: Prof. Darryl C. Wilson.

CASES

BROKERS:

Broker is not procuring cause of sale to person who viewed property during term of listing agreement but negotiated to buy from seller after expiration of agreement. Seller and Broker entered into an exclusive one-year listing agreement for the sale of a large tract of land for an asking price of $435,000 and a fixed commission of $25,000. The agreement had a one-year “tail” that compelled Seller to pay the commission if within oneyear of the agreement’s expiration, Seller sold the property and Broker was the procuring cause. Broker listed the property on several websites, including “Farm & Forest” and showed it to several potential buyers, receiving only one offer below the asking price, which Seller rejected. After the first listing expired, the parties entered into two more one-year listing agreements with the same provisions, including a one-year tail. After the third listing agreement expired, a prospective purchaser who had seen the property earlier with Broker’s assistance expressed a renewed interest in the property. Broker requested that Seller sign an additional listing, but Seller refused. Months later, the same purchaser contacted Seller directly about the property, and they entered into a purchase and sale agreement at the original asking price. Broker sued Seller and the purchaser, alleging breach of contract, quantum meruit, and negligent misrepresentation. The trial court dismissed the claim against the purchaser and rejected the claims against Seller on the grounds that the terms offers a look at selected recent cases, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers. of the contract were not satisfied and that quantum meruit is not available when there is an enforceable contract. The supreme court affirmed. First, the court noted that the plain language of the contract requires a commission only if the sale is effected within 12 months of the expiration of the agreement and Broker is “the procuring cause of the sale.” This means Broker must procure a purchaser ready, willing, and able to purchase at the price and terms prescribed by Seller. Here, although Broker placed the original advertisement in Farm & Forest, which first drew the purchaser to the property and showed the property, despite several later exchanges, Broker was unable to deliver an offer during the listing term or tail. Indeed, for a while, the eventual purchaser was actively engaged with another broker and looking at other properties. The successful negotiations between Seller and the purchaser occurred after Seller had disengaged from Broker. Masiello Real Estate, Inc. v. Matteo, 2021 VT. LEXIS 105 (VT. Oct. 15, 2021).

CONSTRUCTION CONTRACTS:

Owner does not have cause of action against unlicensed subcontractor who does not sign construction con- tract. The Pommers engaged Childs to build a garage on the Pommers’ property. Childs developed designs and invoiced the Pommers, who paid him directly. Childs also provided the Pommers with estimates for project costs and time of completion. When the Pommers met Childs to sign the construction contract, Childs explained that he did not have a contractor’s license and introduced the Pommers to Granger, who was a licensed general contractor. The Pommers signed documents with Granger Construction Company listed as the contractor and paid Granger Construction the initial draw for the project. Construction commenced with both Granger and Childs working on the garage, and with both presenting invoices to the Pommers, which the Pommers paid with checks to Granger Construction. The Pommers questioned the extensive delays, the quality of the work, and why no other workers assisted Childs and Granger. Childs and Granger ultimately requested money beyond the estimate, the total of which the Pommers had already paid, and indicated they would not work any further without receiving additional payments. The Pommers hired others to complete the garage which, because of the substandard work of Childs and Granger, faced potential demolition. The Pommers filed suit, alleging breaches of express and implied warranties, fraudulent misrepresentation, and the tort of outrage. The trial court entered judgment for the Pommers against both Childs and Granger Construction, and both parties appealed. The supreme court affirmed the judgment against Granger Construction but reversed the judgment against Childs. The court reviewed the contract between Granger Construction and the Pommers, finding it undisputed that Childs was not a signatory, was not named in the document, and was not an owner or member of Granger Construction. Although the contract referenced contractor/subcontractor relations, it did not provide for any duties owed from a subcontractor to a property owner. Therefore, Childs was not liable for breach of contract or breach of warranties. Childs v. Pommer, 2021 Ala. LEXIS 87 (Ala. Sept.3, 2021).

COTENANTS:

Judgment lien does not attach to property held in tenancy by entirety when transferred to non- debtor spouse at divorce. In July 2014, Blount obtained a judgment for over $1 million against her former attorney, Padgett. Thereafter, she employed several strategies to collect, including recording the judgment, filing a lis pendens, and initiating attachment proceedings. At the time, Padgett owned a home as a tenant by the entirety. In 2018, Padgett and his wife executed a property settlement agreement in anticipation of divorce. This agreement was thereafter incorporated into the judgment of divorce, entered on September 27, 2018, which became final on October 27, 2018. In the settlement agreement, Padgett agreed to relinquish all right, title, and interest in the home and to deed the property to his soon- to-be ex-wife. The warranty deed was executed on the same day the divorce decree was entered. In 2019, Blount filed a complaint alleging fraudulent conveyance of title against Padgett and ex-wife. The trial court dismissed the complaint, ruling that property held as tenants by the entirety was not reachable by the creditors of one spouse. On the appeal, the court explained that the tenancy by the entirety exists to protect the marital relationship from the legal hazards confronting owners in other types of tenancies. That protection carries over to an extent after divorce. Under D.C. Code § 16-910, at divorce, title vests immediately in the proper parties in accordance with a court-determined distribution or agreement between the parties. This means that a lien that cannot attach to property held as tenants by the entirety during the debtor’s marriage will not necessarily attach to the property upon the debtor’s divorce. Here, because the divorce decree incorporated the property settlement agreement, there was no interim moment in time when there was any dual interest in the property for a creditor to attach. And, because by definition, tenancy-by-the-entirety property is not the separate asset of the debtor spouse, it is not susceptible to a claim of fraudulent transfer under the Uniform Fraudulent Transfer Act. D.C. Code § 28-3104(a)(1). Accordingly, Padgett’s conveyance to his ex-wife did not hinder or delay Blount’s rights as a creditor because at no time did Blount have a right to attach the property. Blount v. Padgett, 261 A.3d 200 (D.C. 2021).

ECONOMIC LOSS RULE:

Action for defective design by geotechnical engineers is barred by economic loss statute. The Hayeses noticed cracking in the walls and foundation of their home fourteen months after its completion. More than ten years earlier, the builder contracted with Intermountain GeoEnvironmental Services (IGES) to provide a geotechnical report for the planned development. IGES reviewed geological maps of the area, conducted a field investigation, and conducted laboratory testing of soil samples to assess the soil’s pertinent engineering properties. IGES prepared a geotechnical report for the builder, which concluded that the site was suitable for the proposed construction, provided that the recommendations in the report were complied with, which were not at issue in the case. After cracks manifested, the Hayeses hired a different engineering firm to conduct another geotechnical exploration. That firm found a subsurface problem that IGES missed, concluding that the “existing slope of the site fails to meet the minimum factors of safety.” No contractor was willing to undertake the recommended remediation efforts. The Hayeses sued IGES, alleging negligence, negligent misrepresentation for wrongly concluding that the lot was safe and suitable for residential construction, and negligent infliction of emotional distress caused in witnessing the destruction of their home. They sought compensation for the damages and eventual destruction of their home, damage to the lot on which the house was built, moving expenses, and emotional distress damages. IGES moved to dismiss the complaint, stating that the common law and statutory economic loss rule barred the claim because the Hayeses were seeking compensation in tort for purely economic losses and no exception or independent duty existed that would move the claim out of the rule. The trial court granted the motion and the court of appeals affirmed, noting that because there was a statutory economic loss rule, the common law rule did not apply. The supreme court affirmed, first explaining that the economic loss rule began as a judgemade rule to mark “the fundamental boundary between contract law, which protects expectancy interests created through agreement between the parties, and tort law, which protects individuals and their property from physical harm by imposing a duty of reasonable care.” The rule has particular application in the realm of construction projects, which are characterized by detailed and comprehensive negotiated contracts that form the foundation of the industry’s operations. In this sense, allowing property owners to bring negligence actions would impose “economic expectations upon parties” who were not known to the owners and had no contract with the owners.” Under the statutory rule, Utah Code Ann. § 78B-4513(1), an action for defective design or construction is limited to breach of the contract, but such action may include damage to other property or physical personal injury if the damage or injury is caused by the defective design or construction. Though the common law rule continues to apply generally, any “action for defective design or construction” is subject to the statute—meaning that it must be brought as a breach of contract claim rather than a tort claim, unless a statutory exception applies. Looking to other statutes and noting that the geotechnical report is an integral part of the structural design of a building’s foundation, the court concluded that geotechnical engineers were “design professionals” within the meaning of the statute; their report was a necessary component of the structural design of a home. Because the Hayeses’ action was for defective design, the economic loss statute applied and barred the negligence claims. And there was no independent duty that would remove the claim from the statute. That exception requires a showing that the Hayeses were in privity of contract with IGES, but they were not because the firm was hired by the builder. The court was sympathetic to the hardship the Hayeses experienced but felt bound to apply the statute as written. In the court’s view, the statute aims to encourage parties to protect their financial interests through contracts; the court was “not at liberty to graft onto the statute an exception that our legislature chose not to include.” Hayes v. Intermountain GeoEnvironmental Servs., Inc., 498 P.3d 435 (Utah 2021).

EMINENT DOMAIN: Public or quasi-public entity may have liability for inverse condemnation even when entity does not have power of eminent domain over property in question.

UGI Storage filed an application with the Federal Energy Regulatory Commission (FERC) seeking a certificate of public convenience and necessity to acquire and operate an underground natural gas storage facility, then owned by Central Penn Gas (CPG). UGI also sought to include within the certificate a protective buffer zone of 2,980 acres. FERC granted the certificate as to the storage facility but denied it as to the buffer zone on the basis that CPG did not show ownership to all the area. Later, FERC granted a partial certification only to those areas for which UGI had acquired the necessary property rights. Unable to establish title to the area, UGI claimed it had a right to conduct storage operations in the location under the state Eminent Domain Code, 26 Pa. Cons. Stat. § 502(c). UGI stated that it would work to acquire rights in the area, but it never notified property owners or took any formal action toward that end. Property owners filed suit, alleging a de facto taking under the state Eminent Domain Code, claiming that UGI applied for approval of the buffer zone to ensure that there would be no other oil and gas exploration in close proximity to its operations and that UGI in any event utilized properties within the uncertificated segments in the same manner as those in the certificated areas, as an integrated 2,980-acre buffer zone. The owners claimed that the buffer zone effectively prohibited them from all mining by hydraulic fracturing and that leasing entities refused to lease or drill for exploitation of such rights. The trial court dismissed the petition on the ground that an entity must have a property-specific power of eminent domain before it can be liable to pay just compensation under the Eminent Domain Code. Here, the FERC certificate excluded the landowners’ properties from the proposed buffer zone, and the law gives eminent domain power only for lands within the scope of the certification. After a round of intermediary appeals and remand, the supreme court reversed. Under both the federal and state constitutions, private property may not be taken for public use without payment of just compensation to the owners. It is well-settled that the power of eminent domain and the concomitant duty of just compensation can be delegated in furtherance of the public interest. However, the existing statutory scheme contains no reference or suggestion of any requirement of a relationship or nexus between the power and specific property, but only that the condemnor has authority to act and that there is a public use. Hughes v. UGI Storage Co., 263 A.3d 1144 (Pa. 2021).

FORECLOSURE:

Sale at 9 percent of property value to interested party is not set aside for irregularity. In 2011, Elkins purchased residential property from Frelin. Frelin financed the purchase, and Elkins executed a promissory note to Frelin, secured by a deed of trust. In 2016, Elkins defaulted, and Frelin authorized the trustee, Fidelity Agency of Alaska to commence nonjudicial foreclosure. At the time of sale, the property was valued between $358,600 to $370,000 but was subject to additional encumbrances, including a tax lien, a condominium association lien, a judgment lien held by Thomas, and a child support lien held by Alaska’s Child Support Services Division (CSSD). Fidelity gave the statutorily required notice of the default and pending foreclosure sale to all interested parties. Although Fidelity did not give CSSD, as a government agency, a statutorily-required supplemental notice, CSSD received actual notice of the default and sale. None of the notified parties responded or attended the sale. The only bidder at the sale was the Joseph P. Casteel Trust. It turns out that a beneficiary of the trust and daughter of the Casteel trustee was the Fidelity title officer who handled the foreclosure. She arranged for a Fidelity representative to bid on behalf of the Casteel Trust, which purchased the property for $26,443, just $1 over Frelin’s offset bid for the balance due on the promissory note. This represented about 9 percent of the property’s estimated value. Casteel Trust was prepared to bid $107,000 at the foreclosure sale but limited its bid in the absence of other bidders. Thomas, the judgment lien holder, filed a claim to set aside the foreclosure sale on account of gross inadequacy of sales price, seeking to impose a constructive trust on the property and to require a new foreclosure sale. The trial court rejected the claim, finding no substantial irregularities that would affect the fundamental fairness of the sale. Thomas had actual notice of the sale and chose not to participate. The supreme court affirmed. It pointed out that although insufficient notice might warrant setting aside a sale, the only procedural error identified by Thomas was the failure to give supplemental notice to the state. But that requirement aims to protect only the state, not Thomas, and the state was not complaining. The court also rejected the claim that the successful bid representing only 9 percent of the fair market value was grossly inadequate. Inadequate sale price alone generally is not enough to set aside a foreclosure sale unless the sale price is so grossly inadequate that it shocks the conscience by creating a presumption of fraud or is combined with procedural irregularities. The circumstances here did not indicate fraud in the sale, and there were no procedural irregularities creating unfairness. Finally, recognizing some potentially questionable behavior on Fidelity’s part, given that the representative handling the foreclosure had a personal relationship with the winning bidder, this circumstance did not rise to the level of fraud to set aside the sale. As trustee, Fidelity conducted the sale in accordance with its contractual duties to Elkins and Frelin. Fidelity had no obligation to protect junior lienholders. There was no evidence that the sale unduly benefitted the Casteel Trust, and Frelin received the full amount of his secured interest. Thomas v. Joseph P. Casteeel Trust, 496 P.3d 403 (Alaska 2021).

PROPERTY TAXATION:

Parcels in tax increment financing district must be contiguous. The city adopted ordinances to establish a Tax Increment Financing (TIF) district, indicating the parcels within the redevelopment project area. The TIF Act requires that the parcels be “contiguous.” 65 Ill. Comp. Stat. 5/11-74.4-4(a). Two parcels were separated by a gas pipeline right of way. The school board challenged the TIF ordinances on the basis of lack of contiguity. The trial court found the requisite contiguity present despite what it characterized as a public utility right-of-way that it deemed “of no legal consequence.” The school board appealed, and the appellate court reversed. The supreme court affirmed the reversal, first noting that the municipal annexation statute requires contiguity and has an express exception for a public utility right-of-way. As the TIF Act does not define contiguity, the court relied on its own precedent from incorporation and annexation cases indicating that statutory contiguity means that the parcels must touch or adjoin one another in a reasonably substantial physical sense. The court considered this definition well-suited to which redevelopment areas are eligible to reap tax-increment benefits under the TIF Act. The court concluded that the parcels in the proposed plan were not contiguous. Unlike the municipal annexation statute, the TIF Act has no public-utility-right-ofway exception for contiguity. Here, the two parcels were separated by land privately owned by a gas pipeline company that was outside the territorial limits of the city. Bd. of Educ. of Richland Sch. Dist. No. 88A v. City of Crest Hill, 2021 Ill. LEXIS 622 (Ill. Sept. 23, 2021).

TITLE INSURANCE:

Limited partner of named insured does not qualify for coverage as successor because limited partner is not sole owner of named insured. Tithonous Tyrone, LP (Tyrone) is a limited partnership, comprising Tithonous GP, as general partner holding 0.1 percent, and Tithonous Partners, as limited partner holding 99.9 percent. Tyrone bought three parcels totaling 60 acres and used a portion as an assisted living facility. Tyrone obtained a policy of title insurance in the amount of $3.077 million, naming Tyrone as the insured. Thereafter, in connection with a mortgage refinancing Tyrone separated ownership of the two-acre lot on which the assisted living facility sat and conveyed the vacant 58 acres to Tithonous Partners, the limited partner. Tithonous Partners did not obtain a new title policy. Two years later, Tithonous Partners subdivided the 58 acres and sold one lot to Port Pizza. Two years later, Port Pizza commenced an action against Tithonous Partners, alleging that Tithonous Partners had not owned a portion of the land. Tithonous Partners submitted a claim under the title policy issued to Tyrone. Chicago Title denied the claim, stating that a successor obtains the status of insured only when the named insured (Tyrone) is “wholly owned by” the claimant (Tithonous Partners). That was not the case here because the claimant, the limited partner, owned only 99.9 percent of the named insured (Tyrone). The court agreed with the insurer, explaining that contracts for insurance are to be read as written, absent ambiguity. Here, although not defined in the policy, the meaning of “wholly owned” is plain. It means whole ownership, not nearly whole or “effectively whole” as the claimant asserted. It means completely and entirely in an absolute and objective sense. Tithonous Partners, as a limited partner, did not wholly own Tyrone, the limited partnership. The court was not moved by the insured’s argument that this policy provision makes carry-over coverage between such related entities impossible. Tithonus Partners II, LP v. Chi. Title Ins. Co., 2021 U.S. Dist. LEXIS 195179 (W.D. Pa. Oct. 8, 2021).

WATER:

Equitable apportionment applies to allocate rights to water in interstate aquifer. The Middle Claiborne Aquifer underlies portions of eight states in the Mississippi River Basin. It spans tens of thousands of square miles. Claiming an absolute ownership right to all water from the aquifer beneath its surface, even after that water has crossed it boundaries, Mississippi sued the city of Memphis, later joining the state of Tennessee, seeking $615 million in damages for pumping water from the aquifer. Mississippi claimed that even though the Memphis wells were drilled straight down, entirely in Tennessee, the wells and pumping created a depression, altering the historic flow of the water within the aquifer. Mississippi claimed the pumping was tortious and a wrongful taking of its property. It expressly disclaimed equitable apportionment. The Supreme Court granted Mississippi leave to invoke the Court’s original jurisdiction to bring an action against another state and appointed a special master to manage the proceedings. The master determined that the principle of equitable apportionment applies, given that the aquifer was an interstate water resource, and dismissed Mississippi’s complaint but recommended leave to file an amended complaint under that theory. The Supreme Court affirmed unanimously on the finding of equitable apportionment but declined to grant leave to amend. The Court first noted that Mississippi conceded that some water naturally flows from the part of the aquifer beneath Mississippi to part of Tennessee but only to the extent of some 30 to 60 feet per year. Mississippi’s claim was that the Memphis pumping had substantially hastened this existing flow, allowing Memphis to take billions of gallons of groundwater that otherwise would have remained under Mississippi for thousands of years. The equitable apportionment doctrine, which allocates rights to disputed interstate water resource after one state sues another under the Court’s original jurisdiction, traditionally is the exclusive remedy for interstate water disputes unless a statute, compact, or prior apportionment decree controls. The Court had never before held that an interstate aquifer was subject to equitable apportionment, so this was a case of first impression. Equitable apportionment aims to produce a fair allocation of a shared water resource between two or more states. The guiding principle is that states have an equal right to make a reasonable use of a shared water resource. In deciding whether equitable apportionment is appropriate, the Court resisted general propositions and focused its analysis on whether equitable apportionment of the Middle Claiborne Aquifer would be “sufficiently similar” to past applications. The Court found similarity. In the past, equitable apportionment has applied only when transboundary resources are at issue, and this dispute involves a transboundary resource. Wells in Memphis and in northwest Mississippi were pumping the same aquifer. Also important was that water flowed naturally between states; the speed of the flow was not determinative. Although each State has full jurisdiction over the lands within its borders, including the beds of streams and other waters, this right does not confer unfettered ownership or control of flowing interstate waters themselves. The Court found no reason to treat underground aquifers differently from streams and rivers. Indeed, Mississippi’s ownership approach would produce an unsound result—it would allow an upstream state to completely cut off flow to a downstream one, a result contrary to equitable apportionment. Even though Tennessee’s wells are drilled straight down, pumping water located within its own territory, that circumstance is not determinative of rights because the origin of the water is relevant to equitable apportionment. The Court went on to rule that because Mississippi did not request to amend the complaint to assert a claim under equitable apportionment, the special master erred by granting leave to amend. Mississippi v. Tennessee, 142 S. Ct. 31 (2021).

ZONING:

Neighbor may not compel city to enforce zoning ordinance against violator. The Havers believed that their neighbor Galan ran a group home in violation of a city ordinance and complained to the city’s code compliance division. After not receiving a satisfactory response from the city, the Havers filed a lawsuit against the city, zoning officials, and Galan. The trial court dismissed the Havers’ claims against the city and the zoning officials. The Havers later dismissed their claim against Galan but appealed the dismissal against the city. The appellate court reversed regarding the claims for injunctive and declaratory relief. The city successfully petitioned the supreme court for discretionary review. The supreme court quashed the appellate court decision in part and remanded with directions to dismiss the claims against the city. The court found that the appellate court decision was based on a misreading of precedent. Those cases involved only situations where a municipality had violated its own ordinance, which is not what the Havers claimed here. In none of those cases was there the issue of a city’s failure to take enforcement action against a third party. The court stated that it would be wrong simply to assume that all municipal zoning ordinance violations are equally remediable through injunctive relief. The court declined the invitation to interfere with administrative enforcement decisions that traditionally are discretionary and embody value-laden judgments about the proper allocation of scarce judicial resources. City of West Palm Beach v. Haver, 2021 Fla. LEXIS 1572 (Fla. Sept. 30, 2021).

LITERATURE

BEACH ACCESS:

On the surface, this article is about beach access: the right of those seeking access to the beaches and landowners trying to keep them out. But reading deeper, Prof. Prof. Timothy M. Mulvaney, in Walling Out: Rules and Standards in the Beach Access Context, 94 S. Cal. L. Rev. 1 (2020), has much more in mind. Focusing on the different regimes in three states, Texas, Oregon, and New Jersey, he challenges the conventional view that rule-like systems (grounded in robust exclusionary rights or unfettered access privileges) are superior to standard-like systems (contemplating reasonable access) because they produce determinate outcomes. He maintains that rules may be less determinate—indeed, more flexible—than they appear on their face. At the same time, standards that appear open-ended may become more defined by applications that reveal core concepts and, therefore, result in “holdings” that seem like rules. Prof. Mulvaney asserts that the concept of transparency best distinguishes the two. Rules, to the extent that they do not require open, discrete assessments may tend to inhibit transparency. Standards, on the other hand, often tend to embrace transparency. When determining access and exclusion, judges must evaluate competing claims and think about the reasons for deciding. In Prof. Mulvaney’s view, the reasonable access standard invites conversation and communication on what makes access valuable and how that value factors against an owner’s ability to exclude. Standards promise contextual and sensitive decisions. Whether states that have long held to rules are inclined to move openly toward standards under his scheme may well depend on the pace of the shifting tides toward accommodation in land disputes.

CONSTRUCTION CONTRACTS:

Construction contracts are fraught with risk. Getting the job completed on schedule and competently is often a juggling act. In Completion Guaranties Revisited, 56 Real Prop. Tr. & Est. L. J. 1 (2021), attorneys Brian D. Hulse and Kevin Badgley explain two forms of guarantees that are often used to keep contractors on schedule and to control unanticipated costs. First, completion guarantees assure the completion of the contemplated construction project in conformity with approved plans and specifications, in compliance with applicable laws and permits, by a required deadline, and without liens. Second, carry guarantees cover a variety of costs relating to the financed property (other than design and construction costs) over a period of time specified in the guaranty. The costs often include property taxes, insurance premiums, maintenance and management costs, utility charges, ground rent, and interest. Although there is some overlap between the two guarantees, there are nonetheless significant differences in what they purport to cover and the recourses available under them. The authors give a comprehensive analysis of the mechanics of these risk-shifting devices and offer advice for drafting guarantees that are easy to interpret and enforce.

ZONING:

In The Euclid Proviso, 96 Wash. L. Rev. 811 (2021), Prof. Ezra Rosser calls for a reassessment of the value of local zoning as we enter the second century of the institution. Showing how this land use tool has traditionally operated to exclude, sometimes unwittingly, but often intentionally, he recounts the myriad costs of excluding—from concentrated poverty to economic stagnation to health detriments. The artificial boundaries created by zoning have led to dramatically divergent outcomes at the city and even block level. He proposes abandoning the automatic deference to local zoning governance in favor of statelevel limitations, as a way of attacking the entrenched inequality that resulted from Euclidean zoning. Prof. Rosser grounds the new thinking on what he calls “the Euclid proviso,” which would limit local authority when zoning is counter to the larger public interest. Although one or two legislatures have abolished single-family zoning, deference to local zoning remains the norm and single-family zones remain largely unassailable. Stringent limits on density and height keep out the poor and lower-middle classes. Prof. Rosser laments the failure of the “quiet revolution” to upset the status quo in local land-use planning. Although his focus is on top-down restating of the zoning hierarchy, local governments should also pay attention to the Euclid proviso. Although Prof. Rosser is heartened by growing awareness among academics and policymakers that rising inequality is destroying society and the lives of large parts of the population, he cautions that undoing all the pernicious effects of local zoning is a long arc and will face strong resistance from those who have been privileged by the historic regime.

LEGISLATION

CALIFORNIA makes void and unenforceable any covenant, restriction, or condition that prohibits or unreasonably restricts accessory dwelling units. A lot must be zoned for single-family residential use and the units must meet certain minimum standards. Reasonable restrictions are allowed if they do not effectively prohibit the construction of accessory dwelling units or unreasonably increase their construction costs. 2021 Cal Stats. Ch. 360.

NEW YORK eliminates one-month rent cap on deposits and advances for seasonal rentals of dwelling units. The exception applies when the dwelling unit is registered with a government agency, occupied by the tenant for seasonal use, not to exceed 120 days, and the tenant has a primary residence elsewhere. 2021 N.Y. Laws 428.

NEW YORK requires assessment of the efforts of mortgage bankers to meet credit needs of local communi- ties. On an application by a mortgage banker for change of control, the banking superintendent is required to consider the banker’s role in the community, including efforts in making its services known and the geographical distribution of applications, credit extensions, and credit denials. 2021 N.Y. Laws 549.

Published in Probate & Property, Volume 36, No 2 © 2022 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.