PropertyProf Blog

Is Land Use Planning Any Different in Canada?

The Vancouver Sun takes a look.  The take-home point:

In most Canadian cities, the vast majority of growth from 2006 to 2011 was in auto-dependent suburbs. Even in Metro Vancouver, where there was significant population growth in the high-density condos of downtown, more than three times the growth was in auto-dependent suburbs.

Steve Clowney

Dorfman on Private Ownership and the Standing to Say So

Avihay Dorfman (Tel Aviv) has posted Private Ownership and the Standing to Say So (Toronto Law Journal) on SSRN.  Here's the abstract:

Property theory is an ongoing discourse attempting to articulate a compelling answer (or answers) to the following question: what is the single most significant or otherwise interesting thing about the concept of private ownership? In this article, I seek to advance three general claims in response to this question. First, I criticize certain leading attempts to answer this question. Second, the centerpiece of my article defends the claim that an adequate theory of the concept of private ownership must begin with the special standing that an owner possesses, which is to say the standing to demand that others will take the owner as reason-providing for them. Third, I argue that private ownership occupies an important place in between the public and the pre-political: One the one hand, private ownership reflects a genuinely private-law institution; and, on the other, it is a distinctive creature of the political order.

Steve Clowney

Richmond, California to Seize Underwater Mortgages by Eminent Domian

Richmond, California is taking on the mortgage industry with a bold plan to help distressed homeowners:

Richmond, a largely working-class and minority city northeast of Berkeley, has offered to buy 624 home loans at a discount from investors in mortgage bonds, saying the loans are under water and is offering their fair market value.

It has said it may use its eminent-domain powers to seize loans if it can't buy them, an action that would require a separate vote with five of the seven council members in favor. The idea would be to then reduce the principal on the loans and refinance the homeowners, restoring their equity and reducing their payments.

In response, the mortgage industry has threatened to cut off lending to the city, saying seizures of troubled loans would disrupt the entire U.S. system of housing finance. Richmond also is battling a federal lawsuit seeking to shut down the program as unconstitutional -- part of a barrage of current and threatened litigation contesting the plan.

Steve Clowney

Smith on Property Theory and the Development of Technology

Henry Smith (Harvard) has posted Property as Platform: Coordinating Standards for Technological Innovation (J. Competition Law & Economics) on SSRN.  Here's the abstract:

This paper examines the coordination of inputs to the development and use of technology as a problem in the theory of property. Recent misunderstanding of property, in terms of both the substance of its rights and the implications of its remedies, have presented property as an obstacle to – rather than as a platform for – rapidly evolving technology. This paper will first present a framework for property that captures its role in organizations, intellectual property, as well as property law itself. An information-cost theory of property stresses modularity, standardization, and hybrid systems of private and common rights, which allow for separation of functions and specialization. Modularity and separation in property allows for specialization but also give rise to the potential for strategic behavior. Each specialist may only maximize locally, which can lead to social losses. To counteract this strategic behavior, a combination of boundary placement and interface rules can be used, as is commonly seen in common property systems and their variants. The paper then applies this framework to Standard Setting Organizations (SSOs) and shows that separation of the standardization function is yet another type of property separation and specialization. As with other dimensions of separation, strategic behavior becomes possible. But contrary to some widespread views, the tools of property do not simply cause the problem of opportunistic hold up in SSOs; property also provides some solutions, in this case through doctrines of equity that are aimed at counteracting opportunism in general.

Steve Clowney

More Problems With Foreclosure Firms

The New York Times details continued problems with the property management companies that do most of the scut work during the foreclosure proccess:

Faced with more than 10 million foreclosures that have piled up since the start of the mortgage crisis, the nation’s largest banks are turning behind the scenes to property management firms, with the Ohio-based Safeguard the largest, to help them navigate the wreckage, determine the occupancy of the troubled properties and preserve them until the homes can be resold.  As part of the alliance with the banks, the property management firms are dispatched to guard against the problems endemic to vacant properties, like weather damage, mold and vandalism, by winterizing the properties, changing the locks and performing other critical maintenance tasks. In turn, the firms hire lower-paid smaller companies to handle the deluge of work. 

But the firms are coming under fire for using questionable and possibly illegal tactics. [...] [H]omeowners across the nation have lodged complaints with state regulators and filed lawsuits of their own, contending that Safeguard tried to forcibly drive them from their homes in a campaign of fear that involved damaging possessions, changing locks and shutting off electricity. In North Carolina, homeowners said that they had returned to find their houses padlocked and their personal property, including family photographs, destroyed. In Bedford Corners, N.Y., Susan Salzberg Rubin said Safeguard broke into her property multiple times and tampered with the alarm system. In Bethel Park, Pa., Alexandra Hlista said she was forced from her home after multiple break-ins.

Steve Clowney

(HT: Chris Odinet)

Map of the Day: The World's Roads

Steve Clowney

Burkhart on Taxing Manufactured Homes

Ann Burkhart (Minnesota) has posted Taxing Manufactured Homes on SSRN.  Here's the abstract:

Manufactured homes are the most important form of unsubsidized affordable housing in this country. They are home to more than twenty-two million people. The residents are predominantly lower-income, including a large proportion of older people. Yet the costs of purchasing and living in a manufactured home are unnecessarily high, because state law incorrectly categorizes the great majority of them as personal property, rather than as real property.

To correct this problem, the Uniform Law Commission recently promulgated the Uniform Manufactured Housing Act, which provides a process for converting manufactured homes from personal to real property. The act is designed to lower the costs of living in a manufactured home and to create legal parity between the owners of manufactured and site-built homes. A frequently expressed concern about converting the homes to real property is the tax impact for homeowners and for the government. However, no information is publicly available to determine the impact. 

'Taxing Manufactured Homes' addresses that issue by analyzing the differences in taxes on a manufactured home that is classified as personal property with the taxes on the home if it is classified as real property. The article also compares the different tax treatments of manufactured and site-built homes. The results may surprise you, as they did me.

Steve Clowney

September Professor's Corner

It's time for this month's Professor's Corner, brought to you by the ABA Real Property Trust and Estate Law Section.  This month will be a little different because we are switching from audio only calls to webinars.   

Wednesday, September 11, 2013

12:30pm Eastern/11:30 am Central

Register online at http://ambar.org/professorscorner

September’s Program:  “Implications of Same-Sex Marriage for Real Estate and Trust/Estates Practitioners”

Either by court decree, legislative action, or referendum, same-sex marriage is now legally sanctioned in 13 states and the District of Columbia.  Thirty percent of American citizens now live in same-sex marriage jurisdictions.  Demographic trends suggest these numbers will likely increase in the years ahead.

The availability (or unavailability) of same-sex marriage presents challenges for lawyers handling real estate transactions and estate and tax planning for same-sex couples.  September’s Professors’ Corner webinar features two outstanding and highly-regarded experts to address these challenges.

Professor Patricia Cain, Santa Clara University School of Law.  Professor Cain is a national expert in federal tax law and sexuality and the law.  She previously taught for 17 years at the University of Texas and for 16 years at the University of Iowa, where she held the Aliber Family Chair in Law and also served as Interim Provost and later Vice Provost.  She has taught at Santa Clara since 2007.  Her area of specialization is taxation and estate planning for same-sex couples.  She is a Fellow of the American College of Trust and Estate Counsel, and is a frequent lecturer on tax and estate planning for same-sex couples at state and national CLE programs.

Tamara E. Kolz Griffin, Associate Director of the Estate Planning Clinic, Harvard Law School Legal Services Center.  Griffin received her law degree from Harvard and a LL.M. in Taxation from Boston University.  At Harvard, she teaches a seminar on estate planning and supervises clinical students in the areas of estate planning, permanency planning and probate matters.  She was previously a partner in the Private Wealth Services Section of the Boston office of Holland & Knight, LLP, and still maintains a private practice serving clients with estate planning needs.  She is a Fellow of the American College of Trust and Estate Counsel, and has given numerous presentations to national, state and local groups on matters related to same-sex estate planning.

Register for this FREE program at http://ambar.org/professorscorner and join us on Wednesday, September 11!

 I'll be hosting the call.  I hope you can join us!

Tanya Marsh

 

Death Before Eviction

The New York Times reports a disturbing story out of China; farmers killing themselves to protest the government's expropriation of their land:

Over the past five years, at least 39 farmers have resorted to this drastic form of protest. The figures, pieced together from Chinese news reports and human rights organizations, are a stark reminder of how China’s new wave of urbanization is at times a violent struggle between a powerful state and stubborn farmers — a top-down project that is different from the largely voluntary migration of farmers to cities during the 1980s, ’90s and 2000s.

Besides the self-immolations, farmers have killed themselves by other means to protest land expropriation. One Chinese nongovernmental organization, the Civil Rights and Livelihood Watch, reported that in addition to 6 self-immolations last year, 15 other farmers killed themselves. Others die when they refuse to leave their property: last year, a farmer in the southern city of Changsha who would not yield was run over by a steamroller, and last month, a 4-year-old girl in Fujian Province was struck and killed by a bulldozer while her family tried to stop an attempt to take their land.

Steve Clowney

Baxter on Farmland Succession

Jamie Baxter (Dalhousie University) has posted Legal Institutions of Farmland Succession: Implications for Sustainable Food Systems (Maine Law Review) on SSRN.  Here's the abstract:

The legal institutions relevant to farmland succession — defined as the transfer of property in and control over farmland — are increasingly important determinants of sustainable environmental outcomes on modern farms. The history of farmland succession has been written, by and large, through extra-legal processes of transfer and inheritance between generations of close family relations. This familiar “family farm” model, however, is rapidly being replaced by succession arrangements between non-relatives, often strangers, with entrant farmers from non-agricultural backgrounds. As a growing number of current farmers retire and seek creative ways to transfer control and ownership of their farms, the availability and content of property arrangements on farmlands acquire a new significance. The resulting formalization of farmland succession places greater demands on policy makers to craft farmland tenure options and supporting institutions that are suitable to a wider diversity of needs, particularly among small farmers, and to consider the impacts of these arrangements for sustainable food systems over the long term.

Steve Clowney

A Brief History of Buildings That Melt Things

Gizmodo offers a pictorial history buildings that set things alight:

In London this week, a parabolic "death ray" of sunshine—reflected off of London's newest skyscraper—is destroying luxury cars, starting fires, and frying eggs for comedic effect (oh, England). It's a sensational story, but this isn't the first time an architectural laser has literally burned the hair off of passersby.

The offending tower—better know as 20 Fenchurch Street, or "the Walkie-Talkie"—was designed by Rafael Vinoly, a Uruguayan architect based in New York. What some outlets (though not Wikipedia editors) failed to mention? This isn't architect Rafael Vinoly's first time at the architectural death ray rodeo. Back in 201o, guests at the newly-completed Vdara Hotel in Las Vegas reported that the reflection from the glassy facade was "singing the hair" of swimmers at the adjacent pool.

Even outside of Vinoly's oeuvre, buildings that act like lasers are not unheard of. In fact, there's practically a whole legal industry devoted to them. Don your sunglasses and let's take a look.

Steve Clowney

Detroit Will Pay to Take These Houses

The Business Insider reports:

Mayor Dave Bing is trying to save Detroit by offering incentives to lure residents back to abandoned neighborhoods.

One program offers $150,000 in housing renovation money and requiring only $1,000 down to police officers who are willing to relocate to the city. Another offers college graduates $2,500 to rent and $20,000 forgivable loan to buy properties.

Potential home buyers can choose from plenty of cheap or free homes, especially in the blighted neighborhoods of Woodward Ave. and Brush Park.

Steve Clowney

Renuart on The Right to Foreclose and the UCC

Elizabeth Renuart (Albany) has posted Uneasy Intersections: The Right to Foreclose and the UCC   (Wake Forest Law Review) on SSRN.  Here's the abstract:

Historically, the practice of real property and foreclosure law was routine and noncontroversial. This legal landscape significantly altered during the spectacular growth of securitization deals involving trillions of dollars of residential mortgage loans. The National Conference of Commissioners on Uniform State Laws (NCCUSL) was a driving force behind one of these changes. It adopted amendments to Article 9 of the Uniform Commercial Code in 1998, at least in part, to facilitate securitization. These modifications included extending coverage to the sale of (not merely to a security interest in) promissory notes, declaring that the sale of the note also constitutes a sale of the mortgage without the need for a written assignment of the mortgage, and providing for automatic perfection of interests in both the note and the accompanying mortgage without the need to file.

Meanwhile, the behavior of a number of mortgage lending and securitization participants or their agents generated additional legal complications. Examples include the mishandling of loan notes and mortgages, the forging of indorsements or the submitting of fraudulent affidavits to courts in support of their purported right to foreclose, and the pressing of foreclosures without the necessary documentation.

Confusion about the roles of and intersections among Articles 3 and 9 of the UCC and the right to foreclose under state real property law followed in the wake of these changes. These misunderstandings spawned volumes of judicial rulings, many of which appear to be at odds with each other. In an effort to reduce the ensuing legal confusion about the intersections between the right to foreclose and the UCC, this Article provides a roadmap of the relevant rules in Articles 3 and 9 and the right to foreclose in state real property law. Further, it explores the tension developing over the last decade among Articles 3, 9, and the right-to-foreclose concept in state real property law.

This Article advances the literature concerned with the right to foreclose by categorizing recent state appellate court decisions that address this right by the type of analysis applied by those courts. The rulings from Arizona, California, and Georgia fall into one category and are the subject of special scrutiny because they dismiss the role of the UCC outright. Moreover, these three states have experienced some of the worst foreclosure rates in the nation and permit foreclosures to proceed nonjudicially. Hence, these decisions will affect a broad swath of homeowners in danger of losing their homes. The Article then applies statutory construction principles to determine whether those courts ruled out the UCC unnecessarily, proffering that foreclosure laws in those states could be harmonized with the UCC.

Finally, the Article concludes that where inconsistencies arise between the UCC and state real property law, applying statutory construction principles likely will result in creating a more uniform legal landscape throughout the nation, in protecting homeowners from unjustified foreclosures, and in reducing litigation costs and judicial resources in a distraught foreclosure system.

Steve Clowney

Call For Papers: Local Government Law Works-in-Progress

Registration is now open for the 2nd annual Local Government Law Works-in-Progress Conference, which will take place on October 25, 2013 and October 26, 2013, at the newly renamed Dale E. Fowler Law School at Chapman University in Orange, California. You can access the registration form and hotel information here.

Please register for the conference by September 18, 2013. Participants will have the option of either presenting a full draft or an early work in progress/abstract. Draft papers will be due October 7, 2013. Questions should be directed to Kenneth Stahl at [email protected].

Steve Clowney

Echeverria on Koontz as the Worst Takings Decision Ever

John Echeverria (Vermont) has posted Koontz: The Very Worst Takings Decision Ever? on SSRN.  Here's the abstract:

This article argues that Koontz v. St. Johns River Water Management District, the most widely discussed of the Supreme Court’s takings trilogy in the 2012-13 term, represents a major, unprincipled break from prior law and casts an unfortunate pall of confusion and uncertainty over takings doctrine, partly reversing the Court’s recent, successful effort to make takings doctrine more coherent and predictable. The Court ruled that the relatively heightened standard of judicial review established by the Supreme Court for so-called “development exactions” in Nollan v. California Coastal Commission and Dolan v. City of Tigard applies both (1) when the government denies a development permit after the developer rejects a government demand for an exaction as a condition of project approval, and (2) when a permit condition requires a developer to pay or expend money to mitigate project impacts. In so ruling, the Court rejected the position that claims challenging such government orders should be evaluated under either the Court’s relatively forgiving regulatory takings analysis or deferential due process analysis. Justice Elena Kagan wrote a dissent for herself and three other justices, arguing that the case did not involve an actual demand triggering Nollan and Dolan and that the standards established by those cases do not apply to permit conditions requiring the expenditure of money. This article contends that the Koontz decision is one of the worst decisions, if the not the worst decision, in the pantheon of Supreme Court takings cases. In doctrinal terms, the majority opinion flagrantly contradicts or ignores established precedent, fails to acknowledge its departure from prior law, and does not attempt to offer any new, coherent justifications for its novel holdings. As a practical matter, the decision creates a perverse, wasteful incentive for local officials to decline to work cooperatively with developers in designing projects that make business sense and protect the interests of the community. Finally, the decision injects new uncertainty into takings law, setting the stage for future debates over the legitimacy and appropriate scope of intrusive judicial review of local land use decision-making, including whether local governments retain the authority to reject development proposals based on unacceptable project impacts without triggering stringent judicial review.

 

Steve Clowney

Ten Buildings That Survived the Great Fire

On the 5th of September 1666, The Great Fire of London swept through the city's center, destroying most of the buildings inside the old medieval walls.  In all, the fire consumed 13,200 houses, 87 parish churches, St. Paul's Cathedral, and most government buildings. It is estimated to have destroyed the homes of 70,000 of London's 80,000 inhabitants.

The Telegraph has a slideshow of ten building that survived the conflagaration and are still standing.

Steve Clowney

Boyack on Freedom of Contract and the Endangered Right to Transfer

Andrea Boyack (Washburn) has posted Freedom of Contract and the Endangered Right to Transfer on SSRN.  Here's the abstract:

Private community restrictions on property transfer deserve closer scrutiny by the courts because they often conflict with public policy objectives and unjustifiably compromise owners’ property rights. Covenants that run with the land are a strange legal hybrid, neither completely contract nor solely property. As servitudes, they are specifically enforceable and bind subsequent owners of the property in perpetuity. In common interest communities, these covenants further diverge from traditional contracts in being adhesive and non-negotiable conditions bundled into home acquisition. Their terms are prescribed by developers and lenders, not by community members themselves. Yet courts typically uphold transfer restraints in covenants based on freedom of contract principles without fully vetting implications for property rights and market efficiency.

Common interest community restrictions on transfer are poor cases for reflexive enforcement based on principles of contractual freedom. Relying upon the common law prohibition of undue restraints on alienation would enable courts to better balance actual costs and benefits. Free alienability preserves owner autonomy, stimulates market efficiency and avoids adverse disparate impacts on minority groups and other collateral societal harms. Legitimate neighborhood concerns regarding maintenance and behavior are better directly controlled through community use regulations than through alienation restraints. Analyzing community covenant alienation restrictions through the lens of property, not contract, is the superior approach to balancing community interests.

Steve Clowney

Hard-Wired for Generosity?

The Wall Street Journal looks into the new brain science of altruism:

[T]he latest science shows that, in fact, we are . . .  hard-wired to be generous. [...]

When subjects decided to give to charity, areas of the brain associated with the processing of unexpected rewards, such as the nucleus accumbens, lit up. The nucleus accumbens, which contains neurons that release the pleasure chemical dopamine, "is almost like the common currency of the brain. It keeps track of rewards, whatever kind they are," Dr. Harbaugh says. "There's some primary reward people get from seeing money go from themselves to provide to other people." [...]

On balance, Dr. Harbaugh's work suggests that giving completely for its own sake—with absolutely zero expectation of pleasure or other reward in return—is rare. We are forever making complex calculations about whether or not to give in different situations, but whether or not our gift will help someone is far from the only factor we consider. The better we feel when we give, in general, the more often we do it. And as the Georgetown philosopher Judith Lichtenberg points out, even when we think we're giving with absolutely no expectation of reward, we can't be sure; our motivations (feeling good? looking good? gaining social leverage?) may be unconscious, inaccessible even to ourselves.

Steve Clowney

Van Erp on the Codification of European Property Law

Sjef Van Erp (University of Maastricht) has posted Can European Property Law Be Codified? Towards the Development of Property Notions (Book Chapter) on SSRN.  Here's the abstract:

In this contribution an overview is given of, what might be called, the ‘matrix’ of European property law. This matrix (the “classical model” of property law) consists of two layers. The first layer encompasses the leading principles and ground rules of property law. The second layer comprises the notions of subjects, objects and rights. Both layers need to be analysed critically in light of changes within each property law system (e.g. the recognition of de-materialised objects, such as virtual property) and changes from without (economic integration, both regionally and worldwide, resulting in a convergence tendency). The use of “notions”, regarding e.g. what can be an object of property law, might prove to be useful, because notions provide a description, such that their content is as clear and precise as possible, but still open enough to ensure that they can be applied in such a way that all European legal traditions may be encapsulated.

Steve Clowney

Building Melts Car

From the Guardian:

A motorist said intense sunlight reflected from the "Walkie Talkie" − one of several towers under construction in the City, London's financial district − warped his Jaguar that he had parked across the road.

The skyscraper's developers said they were seeking to rectify the problem which they blamed on the position of the sun at certain times of day.

"The phenomenon is caused by the current elevation of the sun in the sky. It currently lasts for approximately two hours per day, with initial modelling suggesting that it will be present for approximately two to three weeks," Land Securities and Canary Wharf said in a statement.

Three parking bays had been taken out of service pending a solution, they added.

Motorist Martin Lindsay told the BBC he had left his car for an hour opposite the building and returned to find the wing mirror, panels and Jaguar badge had "melted".

Steve Clowney