Friday, October 20, 2017
Christine Klein (Florida) has posted Owning Groundwater: The Example of Mississippi v. Tennessee (35 Virginia Envtl. L.J. 474 (2017)) on SSRN. Here's the abstract:
In Mississippi v. Tennessee, a case currently on the U.S. Supreme Court’s docket, Mississippi claims that it owns all groundwater stored underneath its borders that does not cross into Tennessee under “natural predevelopment” conditions—those existing before the advent of modern well technology. Consequently, Mississippi seeks more than $600 million from Tennessee for pumping of wells that tap into a geologic formation that underlies both states. This remarkable claim departs from the U.S. Supreme Court doctrine of “equitable apportionment” under which the Court has resolved interstate surface water conflicts, determining relative rights of use rather than awarding monetary damages based on water ownership. It also departs from the almost uniformly established proposition that the states do not “own” the water within their borders in a physical sense, but instead are authorized to manage that water for the “use” of their citizens. This Article situates the conflict at the crossroads of two broader issues. First, under a phenomenon this Article dubs “groundwater exceptionalism,” the law often treats groundwater differently than surface water, partly as a relic of slow-developing hydrologic knowledge. Second, the dispute goes to the very heart of property law and the meaning of ownership, as distinguished from rights of use. The lower courts have consistently framed this decade-long dispute as a matter of competing uses, but have also interjected the rhetoric of ownership into their opinions. This conflation of use and ownership has the potential to affect the outcome of this case, as well as distort future litigation involving equitable apportionment, regulatory takings, state water rights law, and other legal doctrines.
Thursday, October 12, 2017
If anyone is in the Dallas/Forth Worth area, Texas A&M has a fantastic line-up of property professors coming to town this academic year. Check them out below!:
If you have a property professor coming to speak at your school, contact me and we'll work to do a feature blog post on them and their talk.
(Hat Tip to our own Tim Mulvaney)
Thursday, October 5, 2017
From our good friend and fellow property law prof Tim Mulvaney (Texas A&M), see the following:
Dean, Texas A&M University School of Law Fort Worth, Texas
October 3, 2017
Texas A&M University invites nominations and applications for the position of Dean of the Texas A&M University School of Law. The desired appointment date is July 1, 2018.
Texas A&M University is a tier‐one research institution and American Association of Universities member. As the sixth largest university in the United States, Texas A&M University is a public land‐ grant, sea‐grant, and space‐grant university dedicated to global impact through scholarship, teaching, and service. The members of its 440,000 strong worldwide Aggie network are dedicated to the University and committed to its core values of excellence, integrity, leadership, loyalty, respect, and selfless service.
Located in Fort Worth, the Texas A&M University School of Law is one of 16 colleges and schools that foster innovative and cross‐disciplinary collaboration across more than 140 university institutes and centers and two branch campuses, located in Galveston, Texas and Doha, Qatar. Since joining the A&M family in 2013, the law school has sustained a remarkable upward trajectory by increasing its entering class credentials and financial aid budgets; shrinking the class size; hiring new faculty members, including nationally recognized scholars; and enhancing the student experience. Consistent with its mission, Texas A&M University School of Law integrates cutting edge and multidisciplinary scholarship with first‐rate teaching to provide students with the professional skills and knowledge necessary for tomorrow’s lawyers. Texas A&M University School of Law faculty members and students play a vital role by providing their legal expertise to collaborations with other Texas A&M professionals to develop new understandings through research and creativity.
The next Dean of Texas A&M University School of Law should provide dynamic, innovative, and entrepreneurial leadership and vision to shape the school’s continued transformation into a model for future legal education. Candidates should have a Juris Doctorate and a scholarly record appropriate for appointment at the rank of tenured professor. Other candidates who hold distinguished records of professional and intellectual leadership or outstanding service to the community will also be considered. The successful candidate should be:
- committed to the school’s scholarly mission;
- a strong law school advocate who seeks cross‐unit collaborations with other university schools and colleges;
- a successful fundraiser who can obtain support for various programs and projects, including the Law School Building Project recently approved by The Texas A&M University System Board of Regents, as well as endowed faculty chairs, professorships, and student scholarships;
- an effective administrator with team‐building skills and a collaborative management style appropriate to a complex organization; and
- dedicated to community engagement and public service and experienced at external relations, including outreach to law firms, corporations, and foundations as well as government agencies, non‐profit organizations and policy‐
The Texas A&M University School of Law is located in the heart of downtown Fort Worth, a city known for a unique confluence of Texas history and renowned arts. Fort Worth enjoys a diverse business community, including energy, defense, international trade, and logistics as well as financial services.
Just outside of downtown, Fort Worth has many neighborhoods with recognized schools a short distance from the law school. Fort Worth is known nationally as the home to the Bass Performance Hall, the Kimbell Art Museum, and the Amon Carter Museum of American Art, among others. The Trinity River flows through the city. It features over 40 miles of trails, providing access to the Fort Worth Botanic Garden, the Japanese Garden, the Fort Worth Zoo, and the historic Stockyards. The Fort Worth/Dallas metropolitan area has a total population of more than seven million. It offers a vibrant legal community that supports extensive federal and state court systems, including the Patent and Trademark Office, the Federal Reserve Bank, the National Labor Relations Board, the Environmental Protection Agency, and the Securities and Exchange Commission. Fort Worth/Dallas has one of the world’s largest airports. As one of the most desirable places to live and work in the United States, the metroplex has attracted many multinational corporations.
Applications should include a curriculum vitae, a cover letter including a statement of interest, and a list of three references. Only nominations and applications received by November 17, 2017 are assured consideration. Nominations and applications received after November 17, 2017 may or may not be considered.
Applications and nominations should be submitted electronically in confidence to email@example.com. Applicant information will be kept confidential to the maximum extent allowable by law. Additional information and timeline can be found at http://lawsearch.tamu.edu.
Texas A&M University provides equal opportunity to all employees, students, applicants for employment or admission, and the public, regardless of race, color, sex, religion, national origin, age, disability, genetic information, veteran status, sexual orientation, or gender identity.
Sunday, September 24, 2017
On May 25-26, 2018, the Cambridge University Centre for Property Law will be hosting a conference on regulatory issues in property law. The conference will bring together property law scholars and practitioners from around the world to discuss the most important contemporary issues facing the law of real property. Designed to bring together practitioners and academics, the conference seeks to promote purposeful discussion and build lasting relationships.
A series of panels on May 25 will be followed by a lecture series on May 26. Panel topics include: the role of property as a human and constitutional right; the relationship between property law and environmental law; and the role of real property law research at Universities and the Law Commission. The Saturday lecture series will see distinguished academics and senior members from practice and the judiciary discuss contemporary issues in real property law.
Confirmed speakers and panellists include Nicholas Hopkins (Law Commission), Martin Dixon (Cambridge), Gregory Alexander (Cornell), Susan Bright (Oxford), Tom Allen (Durham), David Elvin QC (Landmark Chambers), Emma Lees (Cambridge), Sjef van Erp (Maastricht), John Lovett (Loyola), Timothy Mulvaney (Texas A&M), Frankie McCarthy (Glasgow), Richard Moules (Landmark Chambers), and Colin Reid (Dundee).
Tickets include both days of the conference with breakfast, lunch, and coffee; a three-course meal in the Old Hall of Queens’ College, Cambridge on Friday 25th May; and a closing drinks reception on Saturday 26th May. Places are limited and cost £225. To book your place, please visit:
Please direct all further enquiries to the conference convenor, Douglas Maxwell, Emmanuel College, St. Andrew's Street, Cambridge, CB2 3AP, dskm2 at cam.ac.uk.
Tuesday, September 19, 2017
Aspiring deans: in light of the rise of our near and dear property prof friends Ben Barros (Toledo) and Hari Osofsky (Penn State) to decanal glory, see the following announcement from Washburn (via Andrea Boyack):
POSITION ANNOUNCEMENT – DEAN, SCHOOL OF LAW
Washburn University invites applications and nominations for the position of Dean of the Washburn University School of Law. The Law School is recognized for its outstanding teaching and faculty scholarship and its commitment to public service. It has a highly favorable student/faculty ratio, with an excellent student body drawn from a national pool.
One of only two law schools in the state of Kansas, Washburn University School of Law is located in Topeka, the state capital. It was established in 1903 and has built a long tradition and legacy of providing an outstanding legal education. Washburn Law offers a broad-based curriculum in national and international law to students enrolled in the J.D., LL.M., and M.S.L. programs. It features six centers for excellence, nine certificate programs, and four dual degree programs. The thirty-two full-time faculty members, along with a strong cohort of adjunct professors, teach and conduct scholarship across a wide array of legal specializations. The Law School enjoys a dedicated staff and strong support from the community.
For more than a century, Washburn Law has demonstrated its commitment to academic excellence, innovation, and diversity. Students choose from nearly 150 courses, including a variety of seminars and clinical offerings. From the first year through graduation, the comprehensive curriculum and innovative programs prepare students for success in the legal profession. For over forty years, Washburn’s Law Clinic has functioned as an in-house general practice law firm, providing students the opportunity to represent actual clients in eight practice areas.
Washburn University School of Law has excelled in the categories most important to our students and alumni: a high-quality curriculum; an exceptional faculty; outstanding library resources; favorable graduation statistics, bar passage rates, and employment outcomes; and affordability. Among other accolades, Washburn University School of Law is ranked #2 in the nation for Government Law and is one of twenty law schools recognized by National Jurist as "Top Law Schools for Government Jobs." Washburn Law is also among the top seventeen law schools in the country for Business and Corporate Law programs. Washburn Law’s Trial Advocacy program is ranked in the top sixteen programs this year.
Washburn Law’s six signature programs – the Center for Law and Government, the Center for Excellence in Advocacy, the Business and Transactional Law Center, the Children and Family Law Center, the Oil and Gas Law Center, and the International and Comparative Law Center – establish an extensive learning network for law students and experienced professionals.
Our Legal Analysis, Research, and Writing program is consistently recognized as a top program by U.S. News & World Report, ranked 15th in the nation in the current edition. We are one of only a few law schools in the country with full-time, tenured and tenure-track legal writing professors who are involved in service and scholarship in the national legal writing community.
WashLaw, initiated in 1991 by the Washburn Law Library, is a legal research portal that provides users with links to significant sites of law-related materials on the Internet. It is one of the premier legal internet research services available to a worldwide audience of practicing and academic legal experts. WashLaw also hosts a large number of law-related discussion groups.
Washburn University seeks an exceptional candidate who has the vision, strategic acumen, entrepreneurial spirit, character, and presence to enhance the school’s existing strengths while moving the School of Law forward to a higher level of distinction. The Dean serves as the academic, fiscal, and administrative leader for the School of Law.
Friday, September 15, 2017
On Thursday, September 28, the John Marshall Law School Center for Real Estate Law will be hosting a a conference on the recent U.S. Supreme Court takings case, Murr v. Wisconsin. The panel will include practitioners and members of industry, including John Groen (Pacific Legal Foundation), Steven Eagle (George Mason), John Echeverria (Vermont), Michael Allan Wolf (Florida), Janet M. Johnson (Schiff Hardin), David S. Silverman (Ancel Glink), and Steven M. Elrod (Holland & Knight). The event runs from 8:30am to 1:00pm and is free of charge. You can register for what sounds like a great day on takings jurisprudence online by going here.
Thursday, September 14, 2017
Tuesday, September 12, 2017
Gerald Korngold (New York Law School) has posted A New Framework for Achieving Free Expression and Speech in the Evolving and Reconceptualized Mall of the Twenty-First Century (Case Western Reserve Law Review) on SSRN. Here's the abstract:
Much has been written lately about the “death” of malls and large-scale shopping centers. The data show, however, that the great numbers of these malls and centers are not going extinct but rather are undergoing an evolution from the fortress-type, retail-focused mall of the 1970s to a twenty-first century model better attuned to current tastes of citizens and consumers. There are indeed significant challenges, including purchasing trends, troubled brick and mortar retail, increased online sales, and living choices. But despite some shock-value headlines, the data show that the number of malls and large centers continue to increase. Moreover, owners are reconceptualizing the mall and large centers to better position them for economic challenges. New manifestations include the mall as an “experience” beyond retail, lifestyle centers, and mixed-use, town center types of shopping centers. Coupled with some indicators that the move to cities has reversed and the unknown future of internet commerce, it appears that while the mall is evolving and must do so, quality properties are far from dead.
This article traces the rise of, current challenges to, and responses for the mall and large-scale shopping centers. It argues that these entities have been a central locus for community interactions and that their twenty-first century iterations may make them even more important. Malls and large-scale shopping centers have become central points at the expense of downtown shopping districts, where true public space was available for free speech and expression necessary for democratic government. This article shows that in drawing people away from the traditional downtowns, malls have consumed this key civic capital without compensating the municipality. In essence, this is no different than a developer utilizing community infrastructure such as local roads without providing compensation and creating externalities for the town to pay for. Thus, malls and large centers have an obligation to provide space for free public expression and speech in their developments.
First Amendment arguments for such space have been soundly rejected in the past. This article suggests new approaches to establish free expression in spaces in malls to address current needs and the likely increased civic centrality of some of “new” malls and shopping centers over this century. It suggests exactions, incentive zoning, and community benefits agreements as strong alternatives, and examines the advantages and disadvantages of each to the public, government, and mall developers/owners. Some of these solutions are mandatory — imposed by government on the developer — while others are more consensual. In addition to developing the legal methods for establishing civic free space, the article makes an additional contribution. By establishing the legal rules of the game, municipalities and developers will be able to negotiate consensual agreements that provide for public expression space but also protect the owner’s business goals; such agreements that align the parties’ interests may ultimately be the best solution.
Saturday, September 9, 2017
This just in from Lee Ann Fennell (Chicago): Cambridge University Press has just published Evidence and Innovation in Housing Law and Policy (Lee Anne Fennell & Benjamin J. Keys, eds. 2017). All chapters are downloadable in PDF as well as viewable in HTML through the Open Access version.
The impressive list of contributors include: William A. Fischel, David Schleicher, Richard A. Epstein, Ingrid Gould Ellen, Brian J. McCabe, Lior Jacob Strahilevitz, Georgette Chapman Phillips, Matthew Desmond, Stephanie M. Stern, Christopher Mayer, Ian Ayres, Gary Klein, Jeffrey West, Atif Mian, Amir Sufi, Patricia A. McCoy, Susan Wachter, Raphael W. Bostic, and Anthony W. Orlando.
Friday, September 8, 2017
To finish up the day, Professor Lionel D. Smith of the McGill University Faculty of Law gave the Tamisiea Endowed Lecture in Wealth Transfer Law. His presentation, titled Give the People What They Want? The Onshoring of the Offshore, was about challenging the growing flexibility of trust law in on- and off-shore jurisdictions. Smith explained how offshore jurisdictions have tried to create flexible trust laws to meet client demands related to freedom of choice. Indeed, some of these new institutions have even been adopted in “onshore jurisdictions.” Smith noted that although freedom of choice is important, private law plays an important policy-balancing role in society.
Professor Smith stated that the offshore trust phenomena is a relatively new concept whereby legislatures enact or modify trust law in order to entice high net-worth individuals to migrate their wealth to these locales. For example, the Cayman Islands created the STAR trust and the British Virgin Islands created the Vista Trust—both aimed at drawing in the trust industry.
Smith explained that the there is an interaction between onshore and offshore trust law - “onshoring of offshoring.” One way this occurs is through how onshore judges interpret these offshore trust laws (like New Zealand judges hearing Cook Island trust disputes). For instance, he described a UK court with jurisdiction over Cayman Island disputes upholding an offshore asset-protection trust but making the debtor’s power of revocation a seizable asset (which the creditor could then exercise itself to get at the trust assets).
Smith explained that another way interaction happens deals with conflicts of laws principles, such as when a common law trust dispute would end up being litigated in a civil law court where trusts are not recognized. Smith also explained, by way of example, that with a star trust the beneficiaries have no right of enforcement—rather enforcement is left entirely to the trustee. Such a state of affairs does not (and cannot) exist under UK trust law.
The final way offshore innovations come into contact with the onshore is more direct—when onshore jurisdictions change their laws to reflect offshore conventions. An example of this is the abolition of the rule against perpetuities and the way several US states have created asset-protection trusts of their own.
Smith concluded by asking whether we should we concerned about onshore jurisdictions enacting these client-centered, off-shore trust concepts. “Should we give the people what they want?” He argues that, we cannot design the legal system around clients – there is more at stake. For instance, with a non-charitable purpose trust (although perhaps sometimes motivated by settlors who truly seek to do no harm) one creates a fund of property that is essentially unowned. Thus, the property is beyond a creditor’s reach yet functionally still under the control of the settlor. Here, as with the Star Trust under Cayman law, the trust obligations can only be enforced by the enforcer (the trustee), which the trustee can choose not to do.
In closing, Smith noted that although these statutory innovations were designed as a competition tool between offshore jurisdictions—onshore jurisdictions are now doing the same thing. He stated that in a race to the bottom, you give up a great deal. For instance, the Bahamas recently passed an executive entity trust whereby a legal person with no shareholders and no assets is created but which cannot incur liability for its actions—all done to create a customized creature to serve the purposes of a client. Smith finished by noting that by giving “the people” (the trust industry) what they want, we—in the longer term—give up so much more.
Greetings from the “Wealth Transfer Law in Comparative and International Perspective” symposium, hosted by the Iowa Law Review and the American College of Trust and Estate Counsel Foundation today at the University of Iowa College of Law.
The first panel this morning featured a fascinating discussion of successions issues across borders. For instance, Naomi Cahn (George Washington) spoke about the rule that gifts made in wills to spouses are deemed to be revoked upon divorce. She critiques this approach, particularly the fact that it conclusively presumes this result would have been in line with the testator’s will. David Horton (UC-Davis) continued with a discussion of what he calls “partial harmless error” in will-making. He shows how the concept has arisen in American courts and uses an empirical study to explore the costs and benefits of adhering to drafting formalities.
Gary Spitko (Santa Clara) discussed lessons that can be learned in the US regarding the succession rights of unmarried, committed partners in light of Scotland’s law reform in this area. Jeffrey Schoenblum (Vanderbilt) enlightened the group on recent problems with cross-border estate problems in martial property, specifically discussing a 2010 case whereby all of the stock in a US corporate was included in the decedent spouse’s estate because, despite the decedent’s domicile being in Belgium and therefore under a community property regime, the court held that the “martial domicile” was in the UK where the community property regime is not applicable. Lastly, Mariusz Zalucki (Krakow & Rzeszow Universities) gave an overview of attempts in Europe to bring some uniformity to the law of inheritance. Excellent moderating was provided by Shelton Kurtz (Iowa).
Stay tuned in for more updates as the day continues!
As we say in the ABA’s Real Property, Trust, and Estate Law Section, for those who work in the world of “death” (rather than “dirt”), I wanted to share a piece by David Horton and Andrea Cann Chandrasekher (both of UC-Davis) on a phenomena that they identified in 2016 known as Probate Lending (Yale Law Journal). We are all familiar with the buying of interests in lawsuits, but what has been less known is the practice of lending funds to heirs in anticipation of a pay-off from the heirs’ interest in an estate. As Horton and Chandrasekher point out in their empirical work, probate lending is both quite lucrative and predatory.
Building upon this work, David Horton recently expanded the research and posted a new article titled Borrowing in the Shadow of Death: Another Look at Probate Lending (William & Mary Law Review) to SSRN. For those interested in property and consumer finance, these two articles are incredibly important. Here’s the abstract:
“Fringe” lending has long been controversial. Three decades ago, demand for sub-prime credit soared, and businesses started to offer high-interest rate cash advances, such as tax refund anticipation loans, payday loans, and pension loans. These products have sparked intense debate and are subject to a maze of rules. However, in Probate Lending, 126 YALE L.J. 102 (2016), a co-author and I examined a form of fringe lending that has gone largely unnoticed: firms that pay lump sums in return for an heir or beneficiary’s interest in a pending decedent’s estate. Capitalizing on a California law that requires companies to file these contracts in probate court, we analyzed seventy-seven loans that stemmed from deaths in 2007. In this companion Article, I report the results of a study of two additional twenty-two months of probate records. My research provides hard evidence about the multi-million dollar inheritance-buying industry, including the prevalence of loans, characteristics of borrowers, how often lenders are repaid, and annual interest rates. I then use this data to compare probate lending to other species of fringe lending and to outline how courts and lawmakers should regulate the practice.
Thursday, September 7, 2017
Municipalities from the Central Valley in California to Upstate New York bear the legacy of reckless mortgage lending. Foreclosed homes and toxic titles have caused blight and cost communities billions of dollars. Many cities tried to halt the risky loans by calling on state and federal legislators and regulators to intervene. Some even passed ordinances aimed at curtailing the high-cost loans that were destroying their neighborhoods. Their pleas were dismissed and their ordinances overturned. Ultimately, the subprime crisis played a central role in the great financial crisis when millions of people lost their jobs and, as a consequence, lost their homes too. As a result, municipalities have born the burden of empty, dilapidated homes that pepper once vibrant neighborhoods. A handful of cities have sued financial institutions, attempting to recover their losses. The lawsuits have been complex and expensive, and limits on municipal standing have dramatically restricted the relief cities can recover.
At the same time that cities were trying to stop abusive loans, most states and the federal government did nothing to curtail the making of unaffordable loans or the growing number of foreclosures. In the worst cases, governmental entities took steps that fueled risky lending. Later, when the subprime crisis morphed into the foreclosure crisis, state and federal governments failed to adequately assist municipalities.
I analyze the legal and regulatory problems municipalities encountered when they attempted to restrict high-risk mortgage loans and when they sought to recover for foreclosure blight. I argue that these problems are the result of a broader, more systemic issue: municipalities are severely limited in their ability to act against commercial interests that cause harm to their communities. In the case of risky mortgage lending, I contend that the sensible policy is to expand localities’ power to protect against actions by financial institutions that threaten or impose costs on communities and I introduce models for local regulation of home mortgage lending.
Monday, September 4, 2017
John Infranca (Suffolk) has posted (Communal) Life, (Religious) Liberty, and Property (Michigan State Law Review) on SSRN. Here's the abstract:
Property rights and religious liberty seem to share little in common. Yet surprisingly similar claims have long been made on their behalves, including bold assertions that each of these two rights uniquely limits the power of the state and serves as the foundation for other rights. This Article reframes the conception of property rights and religious liberty as foundational by foregrounding communitarian aspects of each right. Property and religious freedom are a foundation for other rights, but in a different manner than traditional accounts suggest. It is not the individual exercise of these rights that provides a foundation for other rights, but rather the complementary roles these rights play in the formation of normative communities that, in turn, serve as counterweights to the state.
This Article makes three distinct contributions to existing legal literature. First, it reveals the significant similarities in historical and theoretical conceptions of the foundational status of these two rights. Second, it integrates the developing scholarly literature on the communal and institutional nature of these two rights. Third, it builds upon this literature to contend that the right to property and religious freedom can indeed provide important foundations for rights more generally, but only if we sufficiently protect and nurture, through law, the communities and institutions upon which these rights depend. The Article concludes by suggesting new approaches to assessing a diverse set of contemporary legal disputes: religious communities seeking to locate in the face of local government opposition, Native American communities challenging government actions on sacred lands, and Sanctuary churches opposing immigration enforcement by sheltering individuals on their property.
Sunday, September 3, 2017
Cities across the country are adopting mandatory inclusionary zoning. Yet, consensus about the appropriate constitutional standard to measure the propriety of mandatory inclusionary zoning has not been fully reached. Under one doctrinal lens, inclusionary zoning is a valid land use regulation adopted to ensure a proper balance of housing within the jurisdiction. Under another doctrinal lens, challengers seek to characterize inclusionary zoning as an exaction, a discretionary condition subject to a heightened standard of review addressing the specific negative impact caused by an individual project on the supply of affordable housing in a jurisdiction.
Drawing from the experience of Baltimore, Maryland’s inclusionary zoning ordinance, this Article considers the impact that the uncertainty in the law may have had on the type of inclusionary zoning ordinance adopted by the city. This Article argues that the conversation about inclusionary zoning, land use regulation, and exactions has been formulated in the context of imagery about development that leaves places like Baltimore out. The imagery in these narratives is of an individual landowner powerless in the face of government overreach. The reality is different in those places where land developers are not powerless and instead are often politically influential repeat players. Thus, the real problem presented may be not how to craft doctrine to prevent cities from asking too much of developers, but instead to craft doctrine that ensures cities do not give away too much.
Friday, September 1, 2017
David Gray Carlson (Cardozo) has posted The Federal Law of Property: The Case of Inheritance Disclaimers and Tenancy by the Entireties (Washington & Lee Law Review) on SSRN. Here's the abstract:
The Supreme Court has issued two disturbing tax opinions which disrupt the notion that “property” (when used in federal statutes) refers to state-law notions. In Drye v. United States, the Supreme Court pierced the Arkansas fiction that inheritance disclaimers are retrospective in effect. Thus the Internal Revenue could claim that a tax lien attached to the pre-disclaimer inheritance. Disclaimer could not defeat this lien. In United States v. Craft, the Supreme Court pierced the Michigan fiction that a tenancy by the entireties does not belong to the individual spouses but, rather, the a corporate “marital” entity that is a separate legal person from the individual spouses. Thus, a tax lien encumbered an individual’s share of the entireties even though Michigan would aver that the individual spouse was not a property owner.
This article challenges the notion that tax cases are “special.” Rather, the claim is that these disturbing holdings apply in other federal contexts, especially in bankruptcy cases. Thus, the article claims that there is a federal law of property which is obliterative of state-law notions. The article therefore proclaims that, in bankruptcy, Butner v. United States (admonishing that state law provides the definition of property) is dead.
Wednesday, August 30, 2017
Christopher Serkin (Vanderbilt) and Micheal P. Vandenbergh (Vanderbilt) have posted Prospective Grandfathering: Anticipating the Energy Transition Problem (Minnesota Law Review) on SSRN. Here's the abstract:
Legal change has the potential to disrupt settled expectations and property rights. The Takings Clause provides protection from the most significant costs by requiring compensation following a change in the law, but threats of takings claims can discourage policymakers from adopting sound laws and policies. If specific legal changes can be anticipated far enough in advance, are there tactics available to reduce the risk of takings claims and blunt their political force in the future? We identify innovative tools that preserve regulatory flexibility so that legal changes can avoid takings liability, and we do so specifically in the context of natural gas and the acute threat of climate change. Natural gas poses a particular challenge to policymakers today. Rapid and widespread proliferation of natural gas is essential if we are to make major progress in reducing carbon emissions, but natural gas is often referred to as a bridge fuel because we will eventually have to pivot away from fossil fuel-based electric generation to reduce the risk of catastrophic climate change. Without timely intervention, investments in natural gas infrastructure today may result in vested property rights that the Takings Clause may then protect against significant regulatory changes. We argue that developing a record that constrains the reasonable expectations of investments in natural gas will help to preserve regulatory flexibility in the future. More aggressively, we also propose “prospective grandfathering” as a regulatory innovation. Announcing but delaying the adoption of new regulations, combined with accelerated cost recovery for utilities, should immunize future governments from takings claims if and when climate change compels movement away from natural gas as part of the de-carbonization of our energy supply. These new tools offer promise beyond natural gas, however, and provide a new way of addressing anticipated legal change.
Monday, August 28, 2017
Luke Meier (Baylor) has a new article coming out out titled Drafting a Texas Oil and Gas Lease to Ensure Enforceability of a Consent-to-Assign Clause: How to Make an Oil and Gas ‘Lease’ a Lease, 50 Tex. Tech L. Rev. __ (forthcoming 2017). The article builds on previous works Luke has written that closely examine oil and gas leases. The article argues that, through a simple drafting trick, a “true” term lease can be created when drafting an oil and gas lease, thus preventing a court from striking a consent-to-assign clause as an illegal alienation restraint of a fee estate. The article has a particular focus on Texas law, but the notion has far more reaching application for all involved in oil and gas law.
Saturday, August 19, 2017
(Photo Credit: Buffalo News)
Of the many ills that resulted from the 2008 financial crisis, none garnered such a fantastic moniker as did the “zombie mortgage crisis.” But despite its name, this isn’t an episode of The Walking Dead. Rather, the phrase refers to a practice by mortgage lenders (or, mortgage servicers to be more precise) whereby a notice of foreclosure would be given and the defaulted and distressed homeowner would typically move out in anticipation of a foreclosure sale. But then, the lender would decide not to go through with the foreclosure process after all.
Not finishing the process was typically due to the fact that the property was “underwater” (meaning that the net of the debt due on the mortgage loan and the value of the property subject to the mortgage was in the negative—the secured debt was greater than the value of the collateral, in commercial law terms). This meant that there was no chance the lender could recoup its losses at the sale, which typically resulted in the property becoming REO (owned by the lender itself). This might seem obvious, but lenders don’t like being property owners—they would rather get paid. One reason they really don’t like owning foreclosed property is because ownership comes with costs. For instance, the bank is going to have to pay any homeowners association dues that might be required (which failure to pay can result in a lien on the property). There could also be tort liabilities if someone is hurt on the premises. But the lender can avoid all of this (and did) by just not doing anything—leaving the house still titled in the name of the now-absent homeowner but also leaving the mortgage in place. Hence the name—the mortgage process is initiated, leading one (the homeowner) to believe that foreclosure will soon happen and the mortgage will be gone, only to have the mortgage linger on (potentially forever)--like a zombie. You get the gist...
After receiving notice from JP Morgan Chase in 2008 that foreclosure was imminent, homeowner Joseph Keller vacated his home, moved to a new residence, and tried to pick up the pieces and start again. Two years after he had relocated, however, the county sued Keller because his house, “already picked clean by scavengers,” was in violation of the housing code. Upon returning to investigate, Keller found his former home “in  shambles,” with “hanging gutters and collapsed garage.” Keller also discovered that he owed back taxes, sewer fees, as well as bills for municipal weed and waste removal. Furthermore, he remained personally liable on the Chase mortgage loan, the debt having grown from $62,000 to $84,000 because of two years of unpaid interest, penalties, and fees. Adding insult to injury, the Social Security Administration rejected his disability application because the vacant, crumbling home he still unwittingly owned was a valuable “asset.” Chase had dismissed the foreclosure judgment two months after Kelley had moved out, but somehow Kelley was never informed. (citations omitted).
And the zombie mortgage problem isn't just something that's bad for homeowners. Abandoned property of this kind has a huge impact that reaches far beyond lot lines. Stories abound of zombie mortgaged properties that fall into disrepair and become havens for crime and create public health concerns. This, in turn, has the effect of diminishing the property values of those parcels that are nearby—indeed, the whole community can sink with just a handful of scatter-site abandoned properties. And of course, where the problem is bad enough, local governments see a shrinking of property tax revenues as a result of the decline of neighborhoods where abandoned homes are located. Also, for those vacant properties in common interest communities (like a homeowners association or a condo association), the lender has no reason to pay the assessments (except for those few states which have adopted the limited super priority of the Uniform Common Interest Ownership Act). Whatever lien is imposed by the HOA for nonpayment will almost always be inferior to that of the lender's mortgage. Again, the mortgagee's interest is protected. Thus, those owners still left in the neighborhood must bear the burden of the unpaid assessments.
Naturally, social harms also follow the zombie mortgage practice. Consider, again, an excerpt from Boyack and Berger:
. . . [P]roperties subject to zombie mortgages are concentrated in low-income and minority communities. More than 57% of zombie properties are located in census tracts made up of households in the bottom 40% of income, compared to only 22.5% of zombie properties in communities where household income is in the top 40%. Statistically, if minority households compose at least 80% of a census tract, it is 18% more likely that a foreclosure in that community will end up a zombie mortgage compared with foreclosures commenced in other neighborhoods. (citations omitted).
So why is this important now, since the practice has obviously been going on for several years? Well, in the 2016 legislative session, the New York legislature passed a bill (effective December 2016) to try and address the zombie foreclosure problem. At the time the bill was passed, NY state officials estimated there were over 6,000 homes that were unoccupied and falling into disrepair.
So how does this law work? First, the legislation (known as New York’s 2016 Zombie Property and Foreclosure Prevention Act but more properly Part Q of Chapter 73 of the Laws of New York) has "mandatory" reporting requirements when it comes to informing the state about abandoned homes. Second, the law requires mortgage lenders (servicers to be precise) to maintain vacant and abandoned properties (something that previously was only required when the bank actually became the owner of the property). The trigger for the shift in the obligation to maintain the property comes when the lender has “a reasonable basis to believe that the residential real property is vacant and abandoned . . . and is not otherwise restricted from accessing the property.” If the lender fails to maintain the property, the government can impose a civil penalty of $500 per violation, per day, per abandoned property.
For lenders, the law gives them an expedited foreclosure process if there is a good faith showing that the property has been abandoned. Importantly, the new act mandates that the foreclosing lender must proceed to the foreclosure sale within 90 days of obtaining a foreclosure judgment. If the lender itself purchases the property at the auction, then it must ensure that the home becomes reoccupied within 180 days of the date of acquisition. Lastly, the legislature gave the governor $100 million to be used to help low- to moderate-income individuals purchase and make repairs to these abandoned properties.
So now that we’re one year in (well, a little less), how is the law working? Evidently there are some practical/enforcement problems, as recently reported by the National Mortgage News and other outlets. First, reporting requirements (although mandatory) are not easy to enforce. The law leaves it up to lenders and local governments to report homes that are abandoned or vacant—which can be spotty and unreliable. Also, despite the penalities, the New York Department of Financial Services (the body that is not necessarily charged with enforcement of the law but that has taken up the mantle) reports that no penalties have been assessed since the law took effect. Although the NY deparment reports that banks and their servicers are broadly complying, state officials admit that they do not send inspectors to the properties to assess the situation themselves. And some local officials, like the mayor of Lackawanna, NY, says that not all banks are complying with the law. He noted this past May 2017 that "[t]his is bringing down our neighborhood, not just Lackawanna, not just Western New York but all of New York State by having banks being absent in their obligations in what they're supposed to be doing."
Also, unfortunately the abandoned home registry is not public. State officials say that doing so would make it a target for “squatters and criminal activity.” I’m a bit incredulous about that claim, since I can’t imagine many squatters and/or everyday criminals being sophisticated enough to go check out the Department of Financial Services’ website and find its registry database (or even know about it) and then go through the process of finding the ideal abandoned home for their purposes. Like the CFPB’s complaint database, making this registry public could help researchers and academics in empirically studying the zombie foreclosure issue more closely.
Lastly, NY state officials hope to help local governments build the capacity necessary to enforce this law themselves (an additional task that most municipalities will likely find difficult to pay for without funding from the state or another source).
Here at the #PropertyLawProfBlog, we’ll keep an eye on how this law continues to be rolled out in New York (as well as what other states might be doing to address the zombie foreclosure phenomenon). For now, over and out!
Wednesday, August 9, 2017
The international peer-reviewed journal Planning Theory has put out a CFP for a special issue the journal is producing to "critically survey the current state of the concept of ideology as it relates to planning theory, policy and practice across a variety of geographical contexts and advance debates about its analytical value from a variety of different but related theoretical positions." Abstracts of 500 words are due by October 20, 2017 to Edward Shepherd (firstname.lastname@example.org).