So You Think You Can Sell/Buy or Lease Privately, Eh?


Have you ever thought of the legally ramifications of selling on your own? Ever thought you could save commissions and in doing so you keep more? Ever thought every REALTOR® is the same and taken a discount service broker?

Read below and let’s chat because these are common disputes I have found, that seem small, but are disastrous to an agreement to purchase or lease, leaving you at the end of the day with the headache that will cost you more than our commission.

#WorkWithAnExpertOntario a big picture approach to real estate #iancharleboisteam

NOTE: The focus is on the ISSUE, RULE, and APPLICATION. These are U.S. focused responses. For Canadian related answers email me. The responses have been re-written from a published book and are designed to highlight potential issues related to real estate sales.

Environmental Impact Statement

ISSUE: Whether a challenged decision to prepare an environmental impact statement (EIS) is required for a sale of land and if the actual or anticipated award of the sale contracts could take place without an EIS.

RULE: Section 102 (2)© of NEPA requires that all federal agencies include a detailed statement of environmental consequences-know as an EIS-“in every recommendation or report on…major of federal actions significantly affecting the quality of the human environment.”

APPLICATION: To define “significantly” affects to the environment within the meaning of Section 102(2)© factors include, inter alia (1) the “degree to which the effects on the quality of the human environment are highly controversial (2) the “degree to which the possible effects on the human environment are highly uncertain or involve unique or unknown risks; (3) “whether the action is related to other actions with individually insignificant but cumulatively significant impacts. Significance exists if it is reasonable to anticipate a cumulatively impacts on the environment. Significance cannot be avoided by …breaking [the action] down into small component parts;” (4) “whether the action threatens a violation of Federal, State or local law or requirements imposed for the protection of the environment.”

CONCLUSION: “Irreparable damage is presumed when an agency fails to evaluate thoroughly the environmental impact of a proposed action… The policies underlying NEPA weight the scales in favour of those seeking the suspension of all actions until the Act’s requirements are met.”

CERCLA Liability: Parent Corporation

ISSUE: Whether a parent corporation that actively participated in, and exercised control over, the operations of a subsidiary may, without more, be held liable as an operator.

RULE: If it satisfies certain statutory conditions, the United States may, for instance, use the “Hazardous Substance Superfund” to finance cleanup efforts; which it may then replenish by suits brought under 107 of the Act against, among other things “any person who at the time of disposal of any hazardous substance owned or operated any facility.” So those actually “responsible for any damage, environmental hard, or injury from chemical poisons may be tagged with the cost of their actions. The term “person” is defined in CERCLA to include corporations and other business organizations, and in term “facility” enjoys a broad and detailed definition as well. The phrase “owner operator” is defined only by tautology, however as, “any person owning or operating” a facility 9601(20)(a)(ii) and it is this bit of circularity that prompts our review.

APPLICATION: Fundamental principal of corporate law, applicable to the parent-subsidiary relationship as well as generally, that the corporate veil may be pierced and the inter alia, the corporate form would otherwise be misused to accomplish certain wrongful purposes, most notable fraud on the shareholders behalf.

CONCLUSION: The answer is no, unless the corporate veil may be pierced. A corporate parent that actively participated in, and exercised control over, the operations of the facility itself may be half liable in its own right as an operator of the facility.

Clean Water Act – Jurisdiction Over Wetlands

ISSUE: Whether wetlands, which lie near ditches or man made drains that eventually empty into traditional navigable waters, constitute “waters of the United States” within the meaning of the Clean Water Act.

RULE: “To restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.” The act also states that “it is the policy of congress to recognize, preserve, and protect the primary responsibilities and rights of States to prevent, reduce, or eliminate pollution, to plan the development and use (including restoration, preservation, and enhancement) of land and water resources, and to consult with the Administrator in the exercise of his authority under this chapter.”

APPLICATION: The waters of the United States to include, in addition to traditional interstate navigable waters [a]ll interstate waters including wetlands,”

CONCLUSION: In sum, on its only plausible interpretation, the phrase “the waters of the United States” includes only those relatively permanent, standing or continuously flowing bodies of water ‘forming geographic features” that are described in ordinary parlance as “streams [,] … oceans, rivers, [and] lakes.” The phrase does not include channels through which water flows intermittently or ephemerally, or channels that periodically provide drainage for rainfall.

Leasehold Interest or License?

ISSUE: Whether a given agreement is a lease or a license depending on the intentions of each party.

RULE: The central distinguishing characteristic of a lease is the surrender of absolute possession and control of property to another party for an agreed-upon rental. A License gives no interest in land. It confers only the non-exclusive, revocable right to enter the land of the licensee to perform an act.

APPLICATION: (1) Is item annexed to the lease, (2) a partition off an existing room, (3) maintenance of room required by leaser, (4) access to room exclusive.

CONCLUSION: If parties’ agreements “contain many provisions typical of a lease and conferring rights well beyond those of a licensee or holder of a mere temporary privilege it is to be determined the agreement is a lease and not a license.

Retaliatory Eviction for Drug Use

ISSUE: Whether in deciding to evict for criminal activity does the Public Housing Authority have discretion to consider all circumstances of the case.

RULE: “Public housing agency shall utilize leases which… provide that any criminal activity that threatens the health, safety, or right to peaceful enjoyment of the premises by other tenants or any drug-related criminal activity on or off such premise engaged in by a public housing tenants, any member of the tenant;s household, or any guest or another person under the tenants control, shall be came for termination of tenancy.” 42 U.S.C. 1437d(1)(6)

APPLICATION: Tenants sign an agreement stating that “understand[s] that if I or any member of my household or guests should violate this lease provision, my tenancy may be terminated and I may be evicted.”

CONCLUSION: Section1437(1)(6) requires lease terms that give local public housing authorities the discretion to terminate the lease of a tenant when a member of the house-hold or guest engages in drug-related activity, regardless of whether the tenant knew, or should have known, of the drug-related activity.

Implied Warranty of Suitability – Commercial Tenants

ISSUE: On the applicability and effect an “as is” clause in commercial lease and if this clause is sufficient to waive the implied warranty of suitability.

RULE: Unless the warranty is waived. a landlord in a  commercial lease implicitly warrants that facilities vital to the use of the premise for their intended commercial purpose are free from latent defects and will remain in suitable condition.

APPLICATION: (1) The nature of the defect, (2) its effect on the tenant’s use of the premises, (3) the length of the time the defect persisted, (4) the age of the structure, (5) the amount of the rent, 6) the area in which the premises are located, (7) whether the defect resulted from any unusual or abnormal use by the tenant.

CONCLUSION: That the “as is” condition can be found in the lease within the holdover clause, as being valid; that the “as is” condition waived the implied warranty of suitability, and that there were no genuine issues of material fact preventing application of the “as is” clause, it would be determined that the court could have appropriately relied on that clause to grant summary judgement in favor of the defendant.

Transfer of Leasehold Interest

ISSUE: Whether refusal to consent to the sub-lease is reasonable and that its refusal does not constitute an unconstitutional deprivation of a tenants property rights; adding that it is reasonable in reducing consent to the assignment if the proposed use of the facility is not a permitted use under the terms of the lease.

RULE: The lease contract is the law between parties in defining their respective right and obligations. In interpreting a lease, like other contracts, courts are young to five legal effect to written contracts in accordance with the true intent of the parties. The intent is to be determined by the words of the contract when they are clear, explicitly and do not lead to absurd consequences.

APPLICATION: Withholding consent is “unreasonable” where there are no “sufficient grounds for reasonably prudent business person to deny consent” i.e. if the consent to a proposed sublease or assignment if the proposed sublease or assignee is financially inferior to the present lessee, if the sub-leaser’s activities don’t fall within the permitted uses in the lease or if the sub-leaser’s use would inhibit the lessor’s ability to lease other spaces in the leased property, if the sublease won’t delineate his proposed activities or if the sub-leaser cause the lessor to lose a tenant on the same property.

CONCLUSION: The lessee has the right to under lease, or even to cede his lease to another person, unless this power has been expressly interdicted. The interdiction may be for the whole, or for a part: and this clause is always strictly construed.

Landlord Remedies

ISSUE: Whether a landlord, after the lease had abandoned the property, it has the right to offer a rent-free tenancy in benefit of the leaser and not the lessee, and if it would be inconstant with the rights of the lessee.

RULE: In the absence of legal justification, a tenant who abandons occupant before the expiration of a lease remains liable for the rent for the remainder of the term. Under traditional common-law property rules, the landlord is under no obligation to relate the premises to mitigate the tenant’s liability under the lease. The landlord, may however may elect to retake possession on behalf of the tenant and to re-let the premises for the tenant’s account. Or, the landlord may choose to accept what is in effect the tenants offer to surrender the tenant liable only for rent that accused before the acceptance.

APPLICATION: A surrender and acceptance of the lease may arise either from the express agreement of the parties or by operation of law. A surrender and acceptance by express agreement can only take occur when the conduct of the landlord is inconsistent with the continuing rights of the tenant under the lease. Cancellation of the lease occurs under principals of estoppel because it would be inequitable for either landlord or tenant to assert the continued existence of the lease.

CONCLUSION: When a clause in a lease permits the landlord to re-let the premise, the clause creates a presumption that the reentry and re-letting of the premise was not the acceptance of a surrender or a termination of a lease. However, the relating still must be for the benefit of the original tenant as well as for the justifiable ends of the landlord. If not, the landlords actions would be inconsistent with a continued landlord-tenant relationship to which the landlord seeks to hold the tenant.

Landlord’s Liability for Criminal Acts

ISSUE: The question whether a landlord owes a duty of reasonable care to the tenants of the property.

RULE: We adopt the rule that a landlord is under duty of care to exercise reasonable care in light of all circumstances. We stress that the adoption of the rule is not tantamount to making the landlord an insurer for all injury occurring on the premises, but merely constitutes our remove of the landlord’s common-law cloak of immunity.

APPLICATION: (1) Is the familiar proposition that one who voluntarily assumes a duty also assumes the obligation of due care in performance of that duty. (2) General rule that each person has a duty of care to prevent unreasonable, foreseeable risks of hard to others.

CONCLUSION: The prior similar incidents requirement translates into the familiar but fallacious saying in negligence law that every dog gets one free bite before an owner can be held negligent for failing to control the dog. That license which is refused to a dog’s owner should be withheld from a buildings owners and the owners agents as well.

Rellingeer v. Bremmeyr

ISSUE: Whether those being revocation of authority to secure acceptance and revocation of potential liability for a commission.

RULE: Language in the purchase agreement with respect to the relationship between agent and seller provides that the seller would pay to a REALTOR® or broker a commission equal to a certain percentage of the sale price for negotiating the sale.

APPLICATION: (1) Such an offer would become binding only upon REALTOR®/broker performance of a task of securing a written acceptance up the terms provided by the sellers, and (2) in order that revocation of a broker’s authority may defeat his right to commissions or other compensation it must be made in good faith and not as a mere device to appropriate the benefit of his service and efforts and art the same time escape the payment of commissions earned or about to be earned.

CONCLUSION: The conclusion is to be made that the revocation of their counteroffer was not made in bad faith and with an intent to deprive REALTOR®/broker of a commission was not clearly erroneous.

Crutchley v. First Trust and Savings Bank

ISSUE: Action sought to recover for the alleged negligence and breach of contract of sellers by two licensed real estate agents who represented them in the sale of real property. (i.e. seeking recovery of money damages on theories of negligence and breach of contract.

RULE: In the event of default on this contract, the sellers shall only be in titled to possession of the real estate as of the date of said default. Buyers will only lose their interest in said property and any payments made to date of default.

APPLICATION: (1) By giving an inadequate and incorrect explanation of the non recourse provision, (2) by not affirmatively recommending that sellers obtain legal counsel in a matter in which their interests is required, (3) in discouraging sellers from seeking legal counsel. Also, the REALTOR® shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction requires it.

CONCLUSION: Because of the interrelationship between the negligence and breach of contract issue, in conclusion proof of a breach of this standard of professional conduct would also establish a violation of the agents duties under the listing agreement with the broker.

Fair Housing Council of San Fernando Valley v., LLC

ISSUE: Filled a suit claiming that a website was a content provider which violated the Fair Housing Act (FHA) and various other state laws.

RULE: Section 230 © is that providers of interactive computer services are immune from liability for content created by by third parties. The immunity applies to a defendant who is the “provider … of an interactive computer service” and is being sued “as the publisher or speaker of any information provided by” someone else. “Reviewing courts have treated 230c immunity as quite robust.”

APPLICATION: Roommate certainly does not prompt, encourage or solicit any of the inflammatory information provided by some of its members.

CONCLUSION: Therefore not responsible, in whole or in part, for the creation or development of “its users answers to open-end “Additional Comments” form, and is immune from liability for publishing these responses.

Kaminszky v. Kukuch

ISSUE: Purchaser had sought to have the sale of a house rescinded for breach of an implied warranty of fitness for habitation.

RULE: Implied Warranty – “an implied warranty of fitness for inhibition in the sale of a new house by the builder-vendor to the immediate purchaser.”

Disclosure – “There is no contention that the defendant misrepresented or made any fraudulent representation to the plaintiffs in regards to the condition of the house.”

Inspection Clause – “The property has been inspected by the buyer ‘as is’ in its present condition and shall be delivered in such present condition to them at the time provided… Purchaser is relaying entirely for its condition upon his own examination and purchaser herby releases the sellers, brokers, REALTORS® and sale people herein from any and all liability relating to any defect or deficiency affecting said real estate, which release shall survive the closing of the transaction.”

APPLICATION: For the proposition that this clause does not release the seller from liability for latent defects

CONCLUSION: If not a builder-vendor, therefore, the inspection clause protects seller from liability of latent defects.

Stambovsky v. Ackley

ISSUE: With respect to transactions in real estate, New York adheres to the doctrine of caveat emptor and imposes no duty to the vendor to disclose any information concerning the premises unless there is a confidential or fiduciary relationship between the parties or some conduct on the part of the seller which constitutes “active concealment”.

RULE: Normally, some affirmative misrepresentation or partial disclosure is required to impose upon the seller a duty to communicate undisclosed conditions affecting the premises.

APPLICATION: “In regard to the necessity of giving information which has not been asked, the rule differs somewhat at law and in equity, and while the courts would permit no recovery of damages against a vendor, because of mere concealment of facts under certain circumstances, yet if the vendee refused to complete the contract because of the concealment of a material fact on the part of the other, equity would refuse to compel him so to do, because equity only compels the specific performances of a contract which is fair and open, and in regard to which all material matters known to each have been communicated to the other.” (Rothmiller v. Stein, 38 N.E. 718)

CONCLUSION: Where the seller not only takes unfair advantage of the buyer’s ignorance but has created and perpetuated a condition about which he is unlikely to even inquire, enforcement of the contract (in whole or in part) is offensive to the courts sense of equity. Application of the remedy of rescission, within the bounds of the narrow exception to the doctrine of caveat emptor set forth heron, is entirely appropriate to relieve the unwitting purchaser from the consequences of a most unnatural margin.

Motorists Mutual Insurance Co. v. Richmond

ISSUE: Whether the appellees (persons) had an insurable interest in the insured property at the time of insurance of the policy and the time of the loss.

RULE: In general, it is well-settled law that a person has an insurable interest in the subject matter insured where he has such a relation or connection with, or concern in, such subject matter that he will derive pecuniary benefit or advantage from its preservation, or will suffer pecuniary loss or damage from its destruction, termination, or injury by the happening if the event insured against.

APPLICATION: Since a certain date in time, once a person is deceased and survivor takes over title, who would be in possession of and has exercised dominion over the property. By paying all the taxes, keeping the property insured and making all repairs; also no suggestion of fraud or  additional assumed any risk it did not intend to assume when it issued the policy by the insurance provider.

CONCLUSION: Offspring and survivors as their guarding were fully entitled to use and dominion over the premises.

Johnson v. Ramsey

ISSUE: Whether the court would find that the erroneous description in the deed should be reformed, and persons had no interest in the real property because there has been a total lack of consideration.

RULE: Inadequacy of consideration is not a ground for setting aside a voluntary conveyance, also held that a deed will not be invalid for uncertainty of description if a proper description is furnished by reference to another instrument.

A deed is inoperative unless there has been delivery to the grantee and an essential element of a valid delivery is the granter’s intention to pass title immediately, thus giving up dominion and control of the property.

APPLICATION: A presumption of delivery of a deed attaches when the deed is recorded, that presumption may be debuted by other factors pertaining to the deed.

CONCLUSION: If testimony or other facts sufficiently rebuts the presumption of delivery of the deed – no interests may be applied for compensation to person on the deed.

Restrictive Covenant

ISSUE: Arguments from the Plaintiffs-Appellees whether that a group home violates a restrictive covenant and that enforcing the restrictive covenant against the group home would violate the Federal Fair Housing Act.

RULE: No lot shall ever be used for any purpose other than a single family residence purpose. No dwelling house located thereon shall ever be used for other than single family residence purposes, nor shall any outbuilding or structure located thereon be used in a manner other than incidental to such family residence purpose. The erection or maintenance or use of any building, or the use of any lot for other purposes, including, but not restricted to such examples as stores, shops, flats, duplex houses, apartment houses, rooming houses, tourist courts, schools, churches, hospitals, and filling stations is hereby expressly prohibited.

APPLICATION: First, if the language is in favor of the free enjoyment of the property and against restrictions. Second, we will not read restrictions on the use and enjoyment of the land into the covenant by implication. Third, we must interpret the covenant reasonably, but strictly, so as  not to create an illogical, unnatural, or strained construction. Fourth, we must give words in the restrictive covenant their ordinary and intended meaning.

CONCLUSION: Both the federal and state governments have expressed a strong policy encouraging locating group homes in a single family residential areas and treating them as if they constituted traditional families. This overwhelming public policy is extremely persuasive in directing us toward an expansive interpretation of the term “family.” Entitled to continue – case.

Eminent Domain – Public Purpose

ISSUE: The question presented is whether the city’s proposed disposition of this property qualifies as a ‘public use’ within the meaning of the Takings Clause of the Fifth Amendment to the Constitution.

RULE: The statute expresses a legislative determination that the taking of land, even developed land, as part of an economic project is a ‘public use’ and in the ‘public interest.’

APPLICATION: Two polar propositions are perfectly clear. On the one hand, it has long been accepted that the sovereign may not take property of A for the sole purpose of transferring it to another private party B, even though A is paid just compensation. On the other hand, it is equally clear that a State may transfer property from one private party to another if future ‘use by the public’ is the purpose of the taking; the condemnation of land for a railroad with common-carrier duties is a familiar example.

CONCLUSION: Because over a century of our case law interpreting that provision dictates an affirmative answer to that question, we may not grant petitioners the relief that they seek.

Lucas v South Carolina Coastal Council

ISSUE: Whether the Act’s dramatic effect on the economic value of Lucas’s lots accomplished a taking of private property under the Fifth and Fourteenth Amendments requiring the payment of ‘just compensation.’

RULE: The first encompasses regulations that compel the property owner to suffer a physical ‘invasion’ of his property. The second situation in which we have found categorical treatment appropriate is where regulation denies all economically beneficial or productive use of land. IE. Fifth Amendment is violated when land-use regulations ‘does not substantially advance legitimate state interests or denies an owner of economically viable use of his land.

APPLICATION: Regulations that prohibit all economically beneficial use of land: Any limitation so severe cannot be newly legislate or decreed (without compensation), but must inhere in title itself, in the restrictions that background principals of the State’s law of property and nuisance already place upon land ownership. A law or decree with such an effect must in other words, have been achieved in the courts – by adjacent landowners (or other uniquely affected persons) under the State’s law of private nuisance, or by the State under its complementary power to abate nuisances that affect the public generally, or otherwise.

CONCLUSION: This recognition that the Takings Clause does not require compensation when an owner is barred from putting land to a use that is proscribed by those ‘existing rules or understandings’ is surely unexceptional.

Zoning Changes and Non-conforming uses

ISSUE: Whether an owner’s use of the property prior to the enactment of the zoning ordinance was sufficient to establish it as a non-conforming use.

RULE: The appellant has the burden of providing that any prior non-conforming use was, in fact, used for such non-conforming use and was not ‘a very minimal and sporadic use, incapable of sufficiently exact determination to accord it any grandfather rights.’ Furthermore, that an ordinance “is to be, and should be, strictly construed and any provisions limiting nonconforming uses should be liberally construed.”

APPLICATION: The appellant has the burden to “clearly establish the prior use to avail himself of the grandfather rights.”

CONCLUSION: Prior to enactment of the zoning ordinance, the use of the Appellant was very minimal and sporadic and, incapable of exact determination to accord it any grandfather rights.

Exclusionary Zoning

ISSUE: Whether City’s family composition  rules qualifies as a “restriction regarding the maximum number of occupants permitted to occupy a dwelling with the meaning of the FHA’s absolute exemption.”

RULE: Act’s stated policy “to provide within constitutional limitations, for fair housing throughout the United States.”

APPLICATION: “A refusal to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford [handicapped] person[s] equal opportunity to use and enjoy a dwelling.”

CONCLUSION: City’s zoning code provision describing who may compose family is not a maximum occupant restriction exempt from the FHA under 3607(b)(1).

Liability of Condominium Directors

ISSUE: Whether a condominium owners association and the individual members of the board of directors may be held liable for injuries to a unit owner caused by a third-party criminal conduct.

RULE: The association was formed and exists for the purposes set forth in the Project’s declaration of covenants, conditions and restrictions (CC&Rs). The board of directors (board) exercises the power of the Association and conducts, manages and controls the affairs of the Project and the Association. Among other things, the Association through the board, is authorized to enforce regulations set forth in the CC&Rs. The Association, through the board, is also responsible for the management of the Project and for the maintenance of the Project’s common areas.

APPLICATION: Traditional tort principals impose on landlords, no less than on homeowners associations that function as a landlord in maintaining the common areas of a large condominium complex, a duty to exercise due care for the resident’s safety in those areas under their control.

CONCLUSION: A director who actually votes for the commission of a tort is personally liable, even though the wrongful act is performed in the name of the corporation. Plaintiff will have to prove that each director acted negligently as an individual.

Misclassification of Fixtures as Personal Property

ISSUE: Whether an article is a fixture as set out within a settlement provisions of the divorce decree.

RULE: An article as a fixture is a determination that must be on the particular circumstances of each.

APPLICATION: (1) Actual annexation to the realty or to something appurtenant thereto; (2) Appropriateness to the use or purposes of that part of reality with which it is connected; (3) the intention of the party making the annexation of making permanent attachment to the freehold. This intention of the parties making the annexation is inferred; (a) from the nature of the articles annexed: (b) the relation of the party making the annexation: (c) the structure and mode of annexation: (d) the purpose and uses for which the annexation has been made.

CONCLUSION: All of the articles were anchored to the walls, and the china cabinets were each set into a permanent base. (i.e. ‘part and parcel’ of the house).

Fixture Tests: Intentions of the Parties

ISSUE: Whether an article is a fixture.

RULE: A fixture is defined as property, originally a personal chattel, that has been affixed to the soil or to a structure legally a part of the soil and, being affixed or attached to the reality, has become a part of the realty.

APPLICATION: (1) Whether it is annexed to the realty; (2) whether it is appropriate and adapted to the use or purpose of that part of realty to which it is connected; (3) whether the party making the annexation intended to make it permanent.

CONCLUSION: The annexing party, intended to treat the structure as personalty. Equally, there was strong evidence that the owner of the realty shared that same intention.

Fixture Tests/Trade Fixture

ISSUE: Whether certain items of bank equipment are subject to assessment and taxation as real property or whether they are items of personal property which are exempt from taxation.

RULE: For the purpose of taxation, real property includes “all lands within the state, and all buildings and fixtures thereon.”

APPLICATION: (1) Annexation to the realty, either actual or constructive. (2) Adaptation or application to the use or purpose of that part of the realty to which it is connected or appropriated; and (3) intention to make the article a permanent accession to the realty. The intention which controls is that manifested by the objective, visible facts. The permanence required is not equated with perpetuity. It is sufficient if the item is intended to remain where affixed until worn out, until the purpose to which the realty is devoted is accomplished or until the item is superseded by another item more suitable for the purpose.

CONCLUSION: It was determined that the items in question to be fixtures as each were adapted to the use of the realty and that in applying all factors it was established that the petitioner’s intent was to permanently affix these items to the realty.

Fixture Financing

ISSUE: Seeking a declaration judgement that purchase money security interest in units have priority over the interest of the purchaser (foreclosure).

RULE: Goods are ‘fixtures’ when they become so related to particular real estate that an interest in them arises under real estate law

APPLICATION: Interest arises when the property is (1) physically annexed to the real estate, (2) adapted to the use to which real estate is put, that is, the personal and real property are united in the carrying out of a common purpose, and (3) annexed with the intent to make it part of the realty.

CONCLUSION: It is the intention which the law deduces from such external facts as the structure and mode of the attachment, the purpose and use for which the annexation has been made and the relation and use of the party making it. Therefore, the heating and air-conditioning units were fixtures and part of the real estate.

If you have no idea the application of the law I would consult an expert!

Air Rights

ISSUE: Scoop of rights encompassed in the term ‘air rights’ (1973 Conveyance of Air Rights – case related).

RULE: The zoning resolution imposes height restrictions based on a calculated ratio.

APPLICATION: Divide the total floor area on a lot (the sum of of the gross areas of the several floors of a building) by the area of the lot upon which a building is to be constructed.

CONCLUSION: There has been no trespass on the air development rights acquired by plaintiff (to build the twenty story structure as BCA’s construction did not increase the floor space).

Trespass: Mineral Estate

ISSUE: Whether subsurface hydraulic fracturing of a natural gas well that extends into another’s property is a trespass.

RULE: Gives a mineral rights owner title to the oil and gas produced from a lawful well bottomed on the property, even if the oil flowed to the well from beneath another owner’s tract.

APPLICATION: (1) The law already affords the owner who claims drainage full recourse; (2) allowing recovery for the value of gas drained by hydraulic fracturing usurps to courts and juries the lawful and preferable authority to Railroad Commission to regulate oil and gas production; (3) determining the value of and gas drained by hydraulic fracturing are precluded by the rule of capture; 4) the law of capture should not be changed to apply differently to hydraulic fracturing because nobody in the industry appears to want or need the change.

CONCLUSION: Revered the court of appeals judgement, rendering judgement that Salianas take nothing on his claim for trespass and breach of the implied covenants to protect against drainage, and remand the remainder of the new case for new trail.

Nonnavigable Waters-Surface Use

ISSUE: Whether the owners of property abutting a man-made, non-navigable pond have the right to use the pond for recreational purposes when the majority of the land beneath the pond is privately owned by another party.

RULE: The common law rule should apply

APPLICATION: Holding with respect to non-navigable bodies, owners have same exclusive property rights as over other real estate.

CONCLUSION: Judgement of the Appellate court is reversed and the case is remanded to that court with direction (1) to reverse the judgement of the trial court and (2) to remand the case to tria court with direction to deny the defendants motion for summary judgement and for further proceedings according to law.

Reasonable Use Doctrine

ISSUE: Whether the modified common enemy doctrine should be applied to bar recovery by landowners and tenants whose property was flooded by a culvert under a highway bypass was not designed to handle the normal overflows from a nearby creek.

RULE: Three distinct approaches to controversies involving diversion or impediment of diffuse surface waters: the civil law or natural law flow, the common enemy doctrine, and the reasonable use rule. (Case – adopted the rule of reasonable use).

APPLICATION: Liability arises when a defendant’s conduct is either (1) intentional and unreasonable; or (2) negligent, reckless, or in the course of an abnormally dangerous activity.

CONCLUSION: Trail courts judgement is affirmed. Verdict in favor of MHTC is reversed and remanded.

Lateral Support

ISSUE: Whether the state is liable for damage to the house and property on the removal of lateral support.

RULE: At Common law, the right of owner [sic] to damages for loss of lateral support in the absence of negligence extended only to the land in it’s natural state.

APPLICATION: Under the constitution, the owner is entitled to damages not only to the land in its natural state but also to the buildings and improvements on the property once it is demonstrated that additional lateral thrust from the weight of the improvements has not precipitated or caused the damage.

CONCLUSION: Summary judgement imposing liability on Tr-State is reversed and the matter is remanded with directions to enter a summary judgement of dismissal of the Simons’ claim against Tri-State.

Fee Simple De-feasible

ISSUE: Dale County attempted to obtain the consent of one of the heirs , Hardy Matherson, for the operation of Lipton tournament. Hardy Matherson refused to give his consent, and informed the County that the tennis complex and the operation of the Lipton tournament was contrary to the deed restriction.

RULE: This conveyance is made upon the express condition that the land hereby conveyed shall be perpetually used and maintained for public park purposes only; and in case the use of the said land for park purposes shall be abandoned, then and in that event the said [granter], his heirs. grantees or assigns, shall be entitled up their request to have the said lands reconvened to them.

APPLICATION: Appellant/heirs contend that the operations of the Lipton tournament violates the deed restrictions because it deprives the public of the use and enjoyment of Crandon Park, including the use and enjoyment of the tennis facilities. We are persuaded by this agreement and rule that holding of the Lipton tournament violates the deed restrictions because it virtually bars the public use of Crandon Park during the tournament, and does bar public use of the tennis complex, for extended periods of time.

CONCLUSION: Dade County to be in violation of the deed restriction. We reserve the trail court to order as to the deed restriction, and remand the entry of an order enjoining Dade County from permitting the Lipton tournament to proceed as it is presently held.

Misclassification of Fixtures as Personal Property

ISSUE: Involves a dispute among the surviving children and grandchildren of Max and Erla Feinberg regarding the validity of a trust provision.

RULE: The contrary law relied upon the appellate court to invalidate Max’s beneficiary restriction clause is found in three decisions by the court: Ransdell 172 Ill. 439, 50 N.E. 111 (1898),, Winterland v Winterland, 389 Ill, 384, 59 N.E.@nd 661 (1945) and Estate of Gerbing, 61 Ill.2d 503, 337 N.E.2nd 29 (1975).

APPLICATION: (Specific to the state and case) “which Illinois courts have found to be against public policy, are strikingly similar to the instance case.” The appellate court invoked the “principal that testamentary provisions are invalid if they discourage marriage or encourage divorce.” The courts weighed two potentially competing public policies.

CONCLUSION: Because no grandchildren had a vested interest in the trust assets and because the distribution plan adopted  by Erla has no prospective application, we hold that the beneficiary restrictions clause does not violate public policy.

Trusts and Public Policy

ISSUE: Whether an article is a fixture as set out within a settlement provisions of the divorce decree.

RULE: An article as a fixture is a determination that must be on the particular circumstances of each.

APPLICATION: (1) Actual annexation to the realty or to something appurtenant thereto; (2) Appropriateness to the use or purposes of that part of reality with which it is connected; (3) the intention of the party making the annexation of making permanent attachment to the freehold. This intention of the parties making the annexation is inferred; (a) from the nature of the articles annexed: (b) the relation of the party making the annexation: (c) the structure and mode of annexation: (d) the purpose and uses for which the annexation has been made.

CONCLUSION: All of the articles were anchored to the walls, and the china cabinets were each set into a permanent base. (i.e. ‘part and parcel’ of the house).

Tenancy by the Entirety

ISSUE: Foregoes payment of federal and state income taxes, IRS levied against four parcels of real estate

RULE:  Applying Craft to this case leads to the rule that, pursuant to 6331, the government may levy upon property held by a delinquent taxpayer as a tenancy by the entirety.

APPLICATION: (b) Seizure and sale of property – the term ‘levy’  as used this title includes the power of restraint and seizure by any means. Except as otherwise provided in subsection, (e) a levy shall extend only to property possessed and obligations existing at the time thereof. In any case in which the secretary may levy upon property or rights to property, he may seize and sell such property or right to property (whether real or personal, tangible or intangible). Furthermore, 6331(1) states that “for proceedings applicable to sale of seized property, see section 6335, states any property liable to levy is not divisible, so as to enable the Secretary by sale of a part thereof to raise the whole amount of tax and expenses, the who of such property shall be sold.”

CONCLUSION: We reverse the decision of the district court granting Appellees’ motion for summary judgement, and remand to the district court for further proceedings in accordance with this opinion.

Community Property

ISSUE: A decree of dissolution is ordinarily entered at the conclusion of a default hearing. Is the wife entitled to monies earned/won until this occurs.

RULE: When Arizona spouse a quires an asset before martial dissolution, Arizona law treats the asset as community property unless it falls with one of several exceptions.

APPLICATION: All property acquired by either husband or wife during the marriage, except that which is acquired by gift, devise or descent, is the community property of the husband and wife.”

CONCLUSION: Husbands lottery share was not “acquired by gift, devise or decent” thus it qualifies as a material community asset pursuant to A.R.S. 25-211.

Definition of Security

ISSUE: A disappointed purchaser of a unit in a condominium complex in Hawaii, sued the brokers  who sold the unit, claiming violations of the anti-fraud provisions of the Securities Exchange Act of 1934.

RULE: Both sections 2 of the Securities Act of 1933 and section 3 of the Securities Exchange Act of 1934 define the term “security” to include any “investment contract.”

APPLICATION: (1) an investment of money (2) in a common enterprise (3) with the expectation of profits produced by the efforts of others.

CONCLUSION: Because Hocking raised issues of fact with regards to this prong, as well as the “investment of money” and “common enterprise” factors, the court reversed the summary judgement for the brokers and remanded the case.

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