Property Law Developments—Joseph William Singer

The New Jersey legislature joined an increasing number of states that have passed statutes prohibiting enforcement of transfer fee obligations. 2010 N.J. Laws 102, codified at  N.J. Stat. 46:3-28 to -33. read article The act applies prospectively only. Transfer fee obligations are duties to pay moneys to a prior seller of the land every time it is sold. Such fees restrain alienation of land and were held to constitute illegal vestiges of feudalism in the mid-nineteenth century. See DePeyster v. Michael, 6 N.Y. 467 (1852).

In a straight-forward application of the usual rule, the Maine Supreme Judicial Court recognized an exception to the statute of frauds by enforcing an oral promise to convey land when the promisee relied on the promise and built a house on the land. In this case, the promise was made by parents to their son and daughter. The daughter built a home on the land with the parents’ assistance and then asked for a deed to the land. When the parents refused, she sued them seeking a court order to them to transfer title to the land to her and the court granted her request. Harvey v. Dow, 11 A.3d 303 (Me. 2011).

The Supreme Judicial Court of Maine has created an exception to the presumption that prescriptive use of another’s property is non-permissive when the servient estate is owned by a family member. Androkites v. White, 10 A.3d 677 (Me. 2010). The court held that, in such cases, it is more likely that the use is permissive and thus the usual presumption is overcome. A few states presume use to be permissive in all cases while most states retain the same presumption of nonpermissiveness for both adverse possession claims and prescriptive easement claims.

Governor Jack Markell has signed a bill adding Delaware to the list of states that authorize the creation of civil unions for same-sex couples that have the same rights as married couples under state law. read article The list of states that recognizes civil unions now includes California, Delaware, Hawai`i, Illinois, Nevada,New Jersey, Oregon, and Washington. States that recognize domestic partnership arrangements that have more limited rights include Colorado, Maine, Maryland, and Wisconsin. read article

Jurisdictions that authorize same-sex marriage are Connecticut, District of Columbia, Iowa, Massachusetts, New Hampshire, Vermont. In California, 18,000 couples were married before the constitutional amendment was approved abolishing same-sex marriage. New York and Maryland recognize marriages celebrated in states that recognize them. Rhode Island recognizes out-of-state same-sex marriages for some purposes, while California, Illinois, New Jersey, and New Mexico recognizes such marriages as civil unions. read article

The states disagree about whether parties to real estate transactions can sue each other for fraud when the contract of sale contains a “non-reliance clause” stating that neither party is relying on any representations made by the other party that are not included in the written contract. Some states allow such claims on the ground that “fraud vitiates consent” and such clauses do not amount to agreements to be defrauded. But other states hold that such clauses immunize the contracting parties from claims of fraud based on oral statements made prior to the deal. The Texas Supreme Court has waffled on this issue, first holding that contracts can be avoided on the ground of fraudulent inducement, Williams v. Glash, 789 S.W.2d 261, 264 (Tex. 1990), and then ruling that the sophisticated parties are free to bargain around this rule by non-reliance clauses, Schlumberger Technology Corp. v. Swanson, 959 S.W.2d 171 (Tex. 1997). See also Forest Oil Corp. v. McAllen, 268 S.W.3d 51 (Tex. 2008). However, the court clarified in Italian Cowboy Partners, Ltd. v. Prudential Ins. Co., 2011 Tex. LEXIS 291 (Tex. 2010), that  a non-reliance clause in a real estate contract will not immunize a real estate seller from liability for fraud if it contains a “standard merger clause” which recites that no representations were made other than those in the contract. Only if the clause states that the buyer is not relying on oral statements made by the seller would the buyer be foreclosed from suing for damages for fraud or to rescind the agreement because of fraud. Another way to waive the right to sue for fraud is to do so directly by a clear statement waiving the right to sue for fraudulent inducement.

In this case, the court allowed tenants to rescind a restaurant lease and recover damages when the landlord lied about the condition of the premises which were afflicted with persistent sewer gas odor.

The Supreme Court ruled in Sossamon v. Texas, 2011 U.S. LEXIS 3187 (U.S. 2011), that Congress did not waive the sovereign immunity of the United States when it passed the Religious Land Use and Institutionalized Persons Act (RLUIPA). This means that the only relief available against federal officials for violating the statutorily protected religious freedom rights of federal prisoners is prospective injunctive relief; no damages can be awarded for federal violations of the act. A similar result would apply to land owners whose land use rights are violated by federal officials. The case, however, was not against federal office but state prison officials in a state that accepted federal money to fund its prisons. The precise holding in the case was that prisoners cannot sue such states for damages when those states deprive inmates in state prisons of religious free exercise rights. A similar result could be expected for claims for damages against states and municipalities; such relief appears now to be foreclosed. Of course, states are free to waive their sovereign immunity by clear legislation if they wish to do so.