PropertyProf Blog

NY Court of Appeals Rules in Columbia University Eminent Domain Case

The New York Court of Appeals today upheld the use of eminent domain for an expansion of Columbia University.  Ilya Somin comments at the VC; Matt Festa comments at the Land Use Prof Blog; Tim Sandefur comments at the PLF's blog; and Robert Thomas comments at the Inverse Condemnation Blog.

Ben Barros

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Does anyone read their mortgage documents? Judge Posner didn't.

According to Above the Law, Judge Richard Posner recently admitted at an American Constitution Society conference on regulation that when presented with voluminous documentation at his home equity closing, he signed on the dotted line without reading the paperwork.  David Lat, the Above the Law blogger, was incredulous:

"This generated laughter from the crowd, due to Judge Posner’s status as one of the greatest legal minds of his (or any other) generation. It was amusing to imagine the brilliant Posner flipping page after page of paperwork and mechanically scribbling next to every “Sign Here” flag, without even bothering to read what he was signing. It’s the kind of behavior one would expect from a person earning $35,000 and a buying a $600,000 home two hours outside of Phoenix, circa 2006 — but not from one of America’s leading jurists."

Point taken, but I'm with Judge Posner.  I have been a commercial real estate lawyer for ten years.  During that time, I have purchased two homes.  In both cases, I requested copies of the title work, exception documents, and loan documents from the title company and lender, respectively, prior to closing.  In both cases, they acted like I was completely unreasonable.  The title company couldn't understand why I wanted to review exception documents at all, and the lender couldn't see how the loan documents could be generated prior to closing.  In any event, they both implied, why bother reviewing documents that you cannot negotiate?  (By the way, the purchase agreement was also pretty much non-negotiable.  Standard realtor form, just check the boxes and fill in the blanks.)

This is in stark contrast to commercial real estate deals where everything, no matter how minor, is negotiated.  And I get the business reality -- the $20 million shopping center deal can absorb the transaction costs of negotiation while my house can't. 

But if Judge Posner and I both accept that reviewing form mortgage documents that cannot be changed is a waste of time, I wonder if the conventional wisdom of the mortgage crisis is holding far less legally sophisticated borrowers to a higher standard.

Tanya Marsh

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Requiring a License to Rent in Fremont, Nebraska

Finally, an issue upon which The Huffington Post and the Daily Paul agree:  the "license to rent" ordinance being considered by the voters in Fremont, Nebraska today is a bad idea.  Designed to combat illegal immigrants, the ordinance would require verification of citizenship or residency status to: (1) rent residential real estate; and (2) to obtain employment.  The sample ballot and text of the proposed ordinance can be found here. 

According to an article in last Thursday's Fremont Tribune, the proposed ordinance would require anyone over the age of 18 to obtain an "occupancy license."  Current residents of rental properties would not be required to get a license until they change addresses.  If a child turned 18 while living in a rental property, they would also be required to obtain a license.  The ordinance would also apply to new residents in assisted-living facilities and nursing homes.

To obtain a license, a person would complete an application and pay a $5 fee to the Fremont Police Department.  The applications would require the prospective renter to verify his or her citizenship or residency status.  Those unable to verify their status would be denied an occupancy license.

Fremont, a town of approximately 25,000 residents located 20 minutes northwest of Omaha, seems an unlikely hotspot in the illegal immigration debate.  The homepage for the city calls it "livable and progressive."  However, two of the main employers in the area are meatpacking plants owned by Freemont Beef and Hormel.  Slaughterhouses and meatpacking plants throughout the Plains states are chiefly manned by immigrants, frankly because the jobs are so dangerous, disgusting, and low-paying that they are difficult to fill with people who have more options.  According to Huffington Post, attracted by those jobs, the number of Hispanic people living in Fremont rocketed from 165 in 1990 to 2,060 in 2009. 

Beyond the obvious issues related to racial profiling and discrimination, this proposed ordinance could have devastating practical consequences if it were uniformly enforced.  (And of course, if it isn't uniformly enforced, the racial profiling/discrimination issues just get worse.)  For example, read the perspective of a nursing home administrator in Fremont here.  What other uses will the Fremont Police Department make of the applications?

The good news -- if the ordinance passes today's vote, the ACLU of Nebraska is considering filing an immediate injunction to prevent its enforcement.  

I love Nebraska – my mother's hometown is 10 minutes south of Fremont and I've been there many times – but I agree with both the Huffington Post and the Daily Paul.  This proposed ordinance is a mind-bogglingly bad idea.

Update:  The Fremont Tribune reported on June 22nd that the ordinance passed 57% to 43%. 

Tanya Marsh

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Crafting the First-Year Property Course

Newbie property law prof here.  This summer is marked by great transition for me and my family – from practice to the academy and from Indianapolis to Winston-Salem.  There is so much to do and think about that it is sometimes difficult to figure out where to start.  Just when I thought I had a handle on things, I had the opportunity to attend two AALS conferences back-to-back.  I just got back from the New Law Teachers Conference, which I will blog about later.  The previous weekend was spent in New York City, at the AALS Mid-Year Workshop on Property.

The Mid-Year Meeting was a really fantastic opportunity to meet (in person) some of the people who so generously helped me in this process.  The weekend was also chock-full of interesting ideas. 

The first plenary session focused on what should be included in the introductory Property course.  The panelists were Professors Al Brophy (UNC), Henry Smith (HLS), Stewart Sterk (Cardozo), and Molly Van Houweling (Berkeley).  They each offered a different and interesting perspective.  Professor Brophy discussed incorporating some non-traditional cases to highlight ethnic and racial tensions in the history and development of American property law.  Professors Smith and Van Houweling each presented their thoughts on the inclusion and exclusion of certain topics in the first year course, particularly how to handle intellectual property.  Finally, Professor Sterk shared his approach, which emphasizes asking students to role-play as lawyers and apply doctrine to client counseling problems.

More after the jump.

It has been noted many times that Property is a bit of a hodge-podge – traditional doctrinal topics (servitudes, estates in land) share time with disparate topics like intellectual property and land use.  No two professors solve this challenge in the same way (unless they are sharing syllabi).

During the Q&A portion of the session, Professor Roger Bernhardt (Golden Gate) came to the microphone to share the recommendations of the ABA Task Force on Real Property Law School Curriculum.  (Full disclosure, I am also a member of the ABA Task Force.)  Joanne Martin of the American Bar Foundation, in collaboration with the Task Force, conducted a survey both of property professors, to assess what is included in their courses, and new lawyers practicing real estate law to determine how they valued that content.  Ms. Martin’s full report can be downloaded here. 

The report found that nearly 52% of first year property courses are 4 credit hours, while 19% are 5 hours and 26% are 6 credit hours.  Ms. Martin found a strong correlation between the ranking of the law school according to U.S. News and World Report and the number of credits offered for property.  The Top 20 schools overwhelming offer 4 credits (81.4%) while the majority of 4th Tier schools offer 6 credit hours (57.3%).

The report also measured the frequency of coverage of thirteen topics in the course:  adverse possession, concurrent ownership, easements and servitudes, estates and future interests, intellectual property, landlord-tenant, land use regulation, natural resources, nuisance, personal property, real estate conveyancing, real estate financing, real estate recording, and other.  Ms. Martin has a number of tables which track the frequency of coverage based on the ranking of the school and the number of credit hours offered.

One clear trend that she found is that professors at the Top 50 schools are more likely to cover intellectual property and less likely to cover real estate transactions.  The professors in the Top 100 schools are less likely to cover real estate financing or recording than professors in Tier 3 and 4 schools.  This is perhaps not surprising because the schools in Tiers 3 and 4 are more likely to have 6 hour courses, where more topics may be thoroughly covered.

The paper concludes with the recommendations of the ABA Task Force:

1.    That Property coverage not be reduced below its traditional six units.
2.    That coverage of the rules of estates and future interests not be overemphasized.
3.    That real estate transactions and real estate finance not be completely eliminated from first-year Property courses, even where the credit value of that course has been reduced.
4.    That credit-reduction for Property courses not lead to a de-emphasis of scholarship in the field.
5.    That the bar examiners discontinue their current omission of real estate development (including land use) and other contemporary issues from the scope of their exams.

I think it is a fascinating report and one that is worthwhile reading as we all plan our first year Property courses for next year.  Again, you can download the full report here.

Tanya Marsh

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