Articles Posted in Real Estate & Property Law

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Evendale property owners who wanted to rent their properties had to obtain a permit by allowing the building commissioner to inspect the property or sign a sworn affirmation that the property complied with the code. The commissioner also could inspect structures if he suspected a violation. If the building was occupied, the commissioner was to present credentials and request entry. For unoccupied structures, the commissioner was to make a reasonable effort to locate the owner and ask to inspect. Should someone refuse entry, the commissioner could use “remedies provided by law.” Vonderhaar owns 13 rental properties, over half of Evendale's rental homes. Vonderhaar filed a purported class action under the Fourth Amendment, claiming the code authorized warrantless searches, and the Fifth Amendment, claiming the code required permit applicants to attest to compliance. The district court granted a preliminary injunction, concluding that the inspection procedures facially violated the Fourth Amendment. Evendale subsequently amended its code to allow owners applying for rental permits to “[p]rovide a written certification” from an architect or engineer attesting that a building meets Village standards and adding that when a commissioner suspects a violation, the commissioner may “seek a search warrant based on probable cause.” The Sixth Circuit vacated the injunction for lack of standing. The Village never relied on the code to conduct a warrantless search and the plaintiffs have no risk of impending injury. View "Vonderhaar v. Village of Evendale" on Justia Law

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Tennessee Valley Authority (TVA) operates the coal-fired electricity-generating Gallatin Fossil Plant on a part of the Cumberland River called Old Hickory Lake, a popular recreation spot. The plant supplies electricity to approximately 565,000 households in the Nashville area but generates waste byproducts, including coal combustion residuals or coal ash. The plant disposes of the coal ash by “sluicing” (mixing with lots of water) and allowing the coal ash solids to settle unlined man-made coal ash ponds adjacent to the river. The plant has a permit to discharge some coal combustion wastewater, which contains heavy metals and other pollutants, into the river through a pipe. Other wastewater is allegedly discharged through leaks from the ponds through the groundwater into the Cumberland River, a waterway protected by the Clean Water Act (CWA), 33 U.S.C. 1251. The district court found that TVA violated the CWA because its coal ash ponds leak pollutants through groundwater that is “hydrologically connected” to the Cumberland River without a permit. The theory is called the “hydrological connection theory” by the federal Environmental Protection Agency (EPA). The Sixth Circuit reversed, finding no support for the hydrological connection theory in either the text or the history of the CWA and related environmental laws. View "Tennessee Clean Water Network v. Tennessee Valley Authority" on Justia Law

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Upper Arlington's Master Plan guides its zoning decisions, emphasizing the need to increase the city’s revenue by attracting business development in the small portion of the city’s land that is devoted to commercial use. To further the Plan’s goals, the Unified Development Ordinance restricts the use of areas zoned "office district" to specific uses that are primarily commercial. The operation of schools, both secular and religious, is prohibited within the office district. Nonetheless, Tree of Life decided to purchase a large office building on a 16-acre tract within the office district for the operation of a pre-K through 12th-grade school. After failing to secure authorization to operate the school, Tree filed suit, citing the “equal terms” provision of the Religious Land Use and Institutionalized Persons Act (RLUIPA), 42 U.S.C. 2000cc(b)(1). After two prior appeals, the district court granted Upper Arlington judgment, holding that the Ordinance is no more onerous to Tree than to non-religious entities that generate comparably small amounts of revenue for the city. The Sixth Circuit affirmed. Revenue maximization is a legitimate regulatory purpose. Upper Arlington’s assertion of revenue maximization as the purpose of the Ordinance is not pretextual. Daycares are the only potentially valid comparator put forward by Tree, which presented no evidence suggesting that nonprofit daycares are similarly situated to its proposed school in terms of their capacity to generate revenue. View "Tree of Life Christian Scool. v. City of Upper Arlington" on Justia Law

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Mason, an African-American Ohio resident sued against all 88 Ohio county recorders for violating the Fair Housing Act’s prohibition against making, printing, or publishing “any . . . statement” indicating a racial preference, such as a racially restrictive covenant. Mason’s complaint included copies of land records, recorded in 1922-1957, that contain racially restrictive covenants. There is no allegation that such covenants have been enforced since the 1948 Supreme Court decision prohibiting enforcement of such covenants. Mason maintains that permitting documents with restrictive covenants in the chain of title to be recorded or maintained and making them available to the public violated the Act. Mason alleges that defendants “discouraged the Plaintiff and others from purchasing real estate ... by creating a feeling that they ... do not belong in certain neighborhoods” and that defendants’ actions “damage and cloud the title to property owned by property owners.” Mason’s counsel stated that Mason became aware of the covenants while looking to buy property, a fact not contained in the complaint. The Sixth Circuit affirmed that Mason lacked standing. A plaintiff must show that he suffered a palpable economic injury distinct to himself; any alleged injury was not caused by the county recorders, who are required by Ohio statute to furnish the documents to the public; county recorders cannot redress the alleged harm, as they have no statutory authority to edit the documents. View "Mason v. Adams County Recorder" on Justia Law

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Debtors filed a Chapter 7 bankruptcy petition. They included their interest in Franklin, Ohio real property with three mortgages. PNC held the first two. The home was “underwater.” The Trustee filed an adversary proceeding to avoid PNC’s alleged first mortgage under 11 U.S.C. 544(a)(1) and 544(a)(3) and Ohio law. The bankruptcy court stayed the proceeding pending resolution of questions of law that had been certified to the Ohio Supreme Court in another matter. The Ohio Supreme Court ultimately responded that O.R.C. 1301.401 applies to all recorded Ohio mortgages and acts to provide constructive notice to the world of a recorded mortgage that was deficiently executed under O.R.C. 5301.01. Although the parties agreed that the mortgage's acknowledgment clause was defective and did not substantially comply with section 5301.01, PNC asserted that section 1301.401 vitiates the Trustee’s power to avoid recorded mortgages based on defects in their execution as either a hypothetical bona fide purchaser under 11 U.S.C. 544(a)(3) or hypothetical judicial lien creditor under 11 U.S.C. 544(a)(1). The bankruptcy court denied a motion to dismiss. The Sixth Circuit Bankruptcy Appellate Panel affirmed, finding the Ohio Supreme Court did not address the Trustee’s avoidance powers as a hypothetical judicial lien creditor, and the Ohio Legislature did not make its amendments retroactive. View "In re Oakes" on Justia Law

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The United States charged Hall with unlawful gambling and money laundering and obtained a preliminary criminal forfeiture order for 18 parcels in Knox County. The County determined that Hall owed substantial delinquent real property taxes, giving it a first lien under Tennessee law. Under 21 U.S.C. 853(n)(2), a party asserting an interest in property that is subject to criminal forfeiture may seek a hearing on his alleged interest within 30 days. Knox County filed an untimely claim. The court amended the preliminary forfeiture order to cover three more Knox County properties. Knox County filed a timely second claim and requested an interlocutory sale and delay of forfeiture. The United States stated that accrued taxes and interest would be paid, regardless of whether the taxing authority filed a claim, but argued that Knox County would have no legal interest in accruing taxes once title passes, citing the Supremacy Clause, and objected to delaying a final forfeiture order. The Sixth Circuit vacated the forfeiture order. Knox County has a legal interest in the property (tax lien), so the district court erred in dismissing its claim for lack of standing but it is not necessarily entitled to a hearing. The court may ascertain the scope of Knox County’s interest on summary judgment but must account for that interest before entering a final forfeiture order. The court did not abuse its discretion in denying Knox County’s motion for an interlocutory sale. View "United States v. Hall" on Justia Law

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Plaintiffs are homeowners in centrally-planned neighborhoods in Thompson’s Station, Tennessee. The developers established and controlled owners’ associations for the neighborhoods but have transferred that control to third-party entities not controlled by either the developers or homeowners. While under the developers’ control, the associations each entered into agreements granting Crystal the right to provide telecommunications services to the neighborhoods for 25 years, with an option for Crystal to unilaterally renew for an additional 25 years. The Agreements make Crystal the exclusive agent for homeowners in procuring services from outside providers. Homeowners must pay the associations a monthly assessment fee, which the associations use to pay Crystal, regardless of whether the homeowner uses Crystal's service, and must pay Crystal $1,500 for the cost of constructing telecommunications infrastructure. Crystal uses service easements within the neighborhoods. Crystal had no prior experience in telecommunications-services and contracts with another provider, DirecTV, and charges homeowners a premium above the rate negotiated with DirecTV. Crystal does not provide services outside of the neighborhoods. The plaintiffs claimed that the Agreements constituted self-dealing, unjust enrichment, unconscionability, unlawful tying, and unlawful exclusivity. The Sixth Circuit reversed dismissal, in part, finding plaintiffs’ allegations plausible on their face with respect to the tying claim, but affirmed dismissal of the exclusivity claim. View "Cates v. Crystal Clear Technologies, LLC" on Justia Law

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The Herrs bought property on Crooked Lake in the Upper Peninsula of Michigan, hoping to use the lake for recreational boating and fishing. Most of Crooked Lake lies in the federally-owned Sylvania Wilderness but some remains under private ownership. Congress gave the Forest Service authority to regulate any use of Crooked Lake and nearby lakes “subject to valid existing rights.” The Forest Service promulgated regulations, prohibiting gas-powered motorboats and limiting electrically powered motorboats to no-wake speeds throughout the wilderness area. After noting “nearly a quarter century of litigation over the recreational uses of Crooked Lake,” the Sixth Circuit concluded that both regulations exceed the Forest Service’s power as applied to private property owners on the lake. Under Michigan law, lakeside property owners may use all of a lake, making the Herrs’ right to use all of the lake in reasonable ways the kind of “valid existing rights” that the Forest Service has no warrant to override. Michigan law permits motorboat use outside the Sylvania Wilderness. The Forest Service long allowed motorboat use on all of the lake after it obtained this regulatory authority and it still does with respect to one property owner. View "Herr v. United States Forest Service" on Justia Law

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After the 2008 financial crisis, many banks foreclosed on many properties used to secure the underlying loans. According to the City of Cincinnati, Wells Fargo adopted a policy of violating local and state property regulations when the cost of compliance outweighed the value that could be recouped through the resale of a foreclosed property. The city claimed the violations created a common law public nuisance that lowered property tax revenues, increased police and fire expenses, and added other administrative costs. The parties resolved claims arising from any individual code violations and associated fines attached to properties named in the complaint. The district court rejected the city’s claim as a matter of law. The Sixth Circuit affirmed. The economic-loss doctrine forecloses the claim for damages for a qualified public nuisance under Ohio law. The doctrine bars tort plaintiffs from recovering purely economic loss that “do[es] not arise from tangible physical injury” to persons or property. Absent allegations of an intentional nuisance or an inherently dangerous context, the city cannot pursue an absolute nuisance claim. The city did not identify specific nuisance properties and offered no evidence that the alleged “policy” of selective non-compliance with health and safety codes will inevitably result in a public nuisance. View "City of Cincinnati v. Deutsche Bank National Trust Co." on Justia Law

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LCS, a nondenominational Christian school in Livingston County, Michigan, sought to relocate after operating for several years in Pinckney, LCS entered into a lease agreement to operate its school on the property of Brighton Nazarene Church in Genoa Charter Township. The Township informed LCS that an amended special-use permit was required. The Church applied for a permit on LSC’s behalf. The Township denied the application, citing traffic concerns, inconsistency with the surrounding area’s single-family residential zoning, the failure of the Planning Commission’s proposed conditional approval to mitigate these problems, and the Church’s history of noncompliance with the zoning ordinance and with conditions on its prior special-use permits. The district court rejected, on summary judgment, LCS’s claim that the denial violated the Religious Land Use and Institutionalized Persons Act, 42 U.S.C. 2000cc. The Sixth Circuit affirmed. When a religious institution has an available alternative outside of a desired jurisdiction, and where the distance from the desired location to the alternative property is reasonably close, the artificial boundaries of a particular jurisdiction become less important. The record here does not indicate that traveling roughly 12 miles to Pinckney would be unduly burdensome to LCS’s students. Nor does the record demonstrate that LCS’s religious beliefs required it to locate within Genoa Township. View "Livingston Christian School v. Genoa Charter Township" on Justia Law