Report of the Committee on Recent Literature Concerning Real Estate Law

Report of the Committee on Recent Literature Concerning Real Estate Law

Julia P. Forrestor

Professor of Law

Southern Methodist University

Chair of Committee

The Quarterly Report includes as a regular feature the report of this committee, which reviews books and articles of interest to a national audience of real estate practitioners. Contributors to the following report include these members of the committee:

Contributors to this report:

Susan Alterman

Joseph L. Coleman

Douglas E. Cornelius

Robert D. Drinkwater

Robert S. Frey

Christopher C. Gilmore

Jennifer L. Gomberg

David J. Harwood

Elizabeth J. Huttar

Michael G. Kerman

Claude McCane Moncus

David R. Naka

Charles I. Nelson

Jonathon K. Newsome

Rory O’Brien

Wilson H. Oldhouser III

Pascal Paul Piazza

George W. Tate III

Robert P. Thibeaux

Carl W. White

Caryl A. Yzenbaard.

I. BANKRUPTCY

Edward S. Adams & James L. Baillie, A Privatization Solution to the Legitimacy of Prepetition Waivers of the Automatic Stay, 38 Ariz. L. Rev. 1 (1996).

This article focuses on the importance of the automatic stay in bankruptcy proceedings. The authors argue in favor of upholding waivers of the automatic stay by debtors based on an economic analysis. Baxter Dunaway, Effect of the Bankruptcy Reform Act of 1994 on Real Estate, 30 Real Prop., Prob. & Tr. J. 601 (1996). The author explains how changes in the Bankruptcy Reform Act of 1994 affect various issues relating to real estate interests. He begins by noting how some of the new changes benefit debtors by making Chapter 13 more attractive and concludes by pointing out how some of the substantive changes benefit creditors. Robert L. Lippert, Determining the Appropriate Cramdown Rate in Single-Asset Bankruptcies, 24 Real Est. L. J. 255 (1996). The authors tackle the controversial issue of determining a cramdown rate during a bankruptcy. They review all of the main methods for determining the cramdown rate, pointing out the problems associated with each method. Juliet M. Moringiello, A Mortgage By Any Other Name: A Plea For the Uniform Treatment of Installment Land Contracts and Mortgages Under The Bankruptcy Code, 100 Dick. L. Rev. 733 (1996). This article discusses the status of installment land contracts when a buyer files for bankruptcy. The author argues that installment land contracts should be treated in the same manner as purchase-money mortgages. John C. Murray, The Lender's Guide to Single Asset Real Estate Bankruptcies, 31 Real Prop., Prob. & Tr. J. 393 (1996). Chapter 11 single asset entity bankruptcies are the subject of this article. The author explores the various strategies and options for secured creditors as well as the available alternatives to cramdown plans.
II. CONDOMINIUMS, TIMESHARES AND HOMEOWNER’S ASSOCIATIONS

Gary S. Moore, Notice and Consent to the Financial and Legal Obligations in Property Owners' Associations, 25 Real Est. L. J. 378 (1997).

The author analyzes the debate about whether purchasers of real property consent or are coerced to become members of property owner's associations when buying real estate. He further explains the impact that the increase in required disclosures has had on this debate.
III. CONVEYANCING AND TITLES

James Bruce Davis, More Than They Bargained For: Are Title Insurance Companies Liable In Tort For Undisclosed Title Defects?, 45 Cath. U. L. Rev. 71 (1995).

This article discusses the potential liability in tort that title insurance companies may have to insured owners and lenders for defects that were not disclosed on the title insurance policy. The author argues that title insurance companies are generally not liable in tort and that aggrieved owners or lenders are limited by the remedies enumerated in the title policy for potential causes of action. John W. Fisher, The Scope of Title Examination in West Virginia: Can Reasonable Minds Differ?, 98 W. Va. L. Rev. 449 (1996). This article discusses the impact that substantive law has on title examination. Specifically, it argues that substantive law determines which documents are relevant in a title search and thereby governs the perimeters of a title examination. Thomas C. Homburger & Brian P. Gallagher, To Pay or Not to pay: Claiming Damages For Recharacterization of Sale Leaseback Transactions Under Owner's Title Insurance Policies, 30 REAL PROP., PROB. & Tr. J. 443 (1995). The article is a practical guide for title insurers dealing with underwriting sale leaseback transactions. It examines the risks of recharacterization and the accompanying liability.
IV. ECOLOGY AND ENVIRONMENTAL CONTROL

Douglas A. Henderson, Start Spreading the News: EPA and HUD Lead-Based Paint Disclosure Regulations, 25 Real Est. L. J. 244 (1997).

This article discusses the scope and applicability of the recently issued regulations dealing with lead-based paint disclosure. The enforcement and exclusions of the new regulations are also examined. Katherine A. Pancak et al., Legal Duties of Property Owners Under Lead-Based Paint Laws, 24 Real Est. L. J. 7 (1995). The article begins by explaining the hazards of lead-based paint, and then explains the legal obligations property owners have to reduce the dangers of lead-based paints. It concludes by offering practical advice to property owners seeking to avoid liability due to lead-based paint injuries. Symposium, The Endangered Species Act and Private Property, 32 Land & Water L. Rev. 479 (1997). The University of Wyoming's Institute for Environment and Natural Resources Board held its forum on the Endangered Species Act in May 1996. Topics of the papers presented there included: "The Evolution and Use of the Endangered Species Act", "Judicial Application of the Endangered Species Act and the implications for Takings of Protected Species and Private Property", "Biological Effectiveness and Economic Impacts of the Endangered Species Act", and "The Intent and Implementation of the ESA: A Matter of Scale".
V. EMINENT DOMAIN, INVERSE CONDEMNATION AND TAKINGS

James E. Holloway & Donald C. Guy, Land Dedication Conditions and Beyond the Essential Nexus: Determining "Reasonably Related" Impacts of Real Estate Development Under the Takings Clause, 27 Tex. Tech L. Rev. 73 (1995).

The Supreme Court's essential nexus test for determining whether a municipality has a legitimate interest in imposing a land dedication condition or fee on real estate developers is the subject of this article. The authors highlight the increased protection the Supreme Court gave property rights in Dolan v. City of Tigard. They conclude that municipalities need to do a better job of establishing justifications for land dedication conditions and fees when real estate projects are providing beneficial developments. Kris W. Kobach, The Origins of Regulatory Takings: Setting the Record Straight, 1996 Utah L. Rev. 1211 (1996). The article discusses the regulatory takings doctrine from a historical point of view. The author begins by challenging the widely held belief that regulatory takings jurisprudence began with Pennsylvania v. Mahon in the 1920's, suggesting that it really originated as early as the 1810s. The author reviews the decisions of several antebellum courts, arguing that they provide the proper historical context through which to view the regulatory takings debate, and that the earlier decisions provide a more coherent line of jurisprudence. Ronald J. Krotoszynski, Jr., Fundamental Property Rights, 85 Geo. L. J. 555 (1997). This article discusses the Supreme Court's recent broadening of the Takings Clause, particularly with respect to regulatory takings. The author argues that the Supreme Court's current liberty-based substantive due process doctrine should extend to protect fundamental property rights, which the author argues the federal courts cannot refuse to recognize. Frona M. Powell, The Public Trust Doctrine: Implications for Property Owners and the Environment, 25 Real Est. L. J. 255 (1997). This article examines the intersection of the public trust doctrine with the Fifth Amendment's Takings Clause. Specifically, the author considers the the role the public trust doctrine has in the current debate over how far the government can go in regulating private property to protect the public environment.
VI. HOUSING, FAIR HOUSING AND ADA

Eugene R. Gaetke & Robert G. Schwemm, Government Lawyers and Their Private "Clients" Under the Fair Housing Act, 65 Geo. Wash. L. Rev. 329 (1997).

The 1988 Fair Housing Amendment Act ("FHAA") authorized government lawyers to prosecute housing discrimination cases on behalf of private citizens. Government lawyers representing private citizens in this manner often find themselves caught between representing their private clients and the government. In many of those cases, the private clients find themselves abandoned. This article discusses how the rules of professional conduct operate when these conflict situations arise, focusing particularly on the problem created by the FHAA and how it can be resolved. Marc T. Smith et al., Inclusionary Housing Programs: Issues and Outcomes, 25 Real Est. L. J. 137 (1996). Due to limited budgets with which to address housing problems, governments are looking for the best alternatives. This article examines the political, economic, and historic aspects of inclusionary housing by focusing on how the programs have worked in Montgomery County, Maryland, as well as in New Jersey and California.
VII. LANDLORD AND TENANT

Francis N. Matroianni, Caveat Lessor: Courts' Unwillingness to Find Implied Covenants of Continuous Use in Commercial Real Estate Leases, 24 Real Est. L. J. 236 (1996).

This article deals with the situation that arises when shopping mall tenants choose to cease operations before a lease expires due to deteriorating business conditions. Often the landlords in those situations are not happy to merely receive rent, but wish to evict the tenant and seek either damages or an injunction which would force the tenant to use to the property in the agreed upon manner. Landlords often try to use a covenant of continuous use to enforce their sought after relief. The author discusses the covenant of continuous use and the chances landlords have of succeeding when trying to enforce an implied one. Michael Pappas, How to Conduct a Lease Audit, 24 Real Est. L. J. 247 (1996). Due to the increased number of tenants who question their landlord's annual increase in rent that is normally justified as a cost of living increase, the demand for lease consultants has risen. This article is a practical guide for how to conduct a lease audit to determine if the increase proposed by the landlord is fair. Georgette C. Poindexter, Estopped in the Name of Waiver: The Role of Waiver and Estoppel in Commercial Leasing, 25 Real Est. L. J. 267 (1997). The article begins by defining estoppel and waiver as they are used in the commercial leasing context. It then analyzes the role of both waiver and estoppel on a landlord's ability to terminate a tenant's lease after a default. The author concludes by suggesting methods landlords can use to avoid application of estoppel and waiver.
VIII. MORTGAGES AND LIENS

Morton P. Fisher, Jr. & Richard H. Goldman, The Ritual Dance Between Lessee and Lender- Subordination, Nondisturbance, and Attornment, 30 Real Prop., Prob. & Tr. J. 355 (1995).

The authors examine the common-law underpinnings of subordination, nondisturbance, and attornment agreements and then discuss the case law relevant to those agreements. The authors also discuss the agreements in the context of bankruptcy and foreclosure. Joseph Philip Forte, A Capital Markets Mortgage: A Ratable Model For Main Street and Wall Street, 31 Real Prop., Prob. & Tr. J. 490 (1996). The author examines Wall Street's role in the commercial real estate markets and discusses the creation of the Capital Markets Mortgage, which is a template for commercial mortgages. Norman Geis, Escape From the 15^th Century: The Uniform Land Security Interest Act, 30 Real Prop., Prob. & Tr. J. 289 (1995). The author argues that all states should adopt the Uniform Land Security Interest Act. To support this conclusion, the author examines the status of current state laws and discusses alternatives for reforming them. James B. Hughes, Jr., Taking Personal Responsibility: A Different View of Mortgage Anti-Deficiency and Redemption Statutes, 39 Ariz. L. Rev. 117 (1997). The author argues that the mandatory statutory right of redemption and anti-deficiency legislation are symptomatic of America's unwillingness to require personal responsibility for individual actions, which results in a moral detriment for society at large. The author suggests that government has provided too much consumer protection, and proposes a system which would offer less protection from rights of redemption and anti-deficiency legislation, but would offer more in terms of mandatory mortgage disclosures. Stephen F. J. Ornstein, Examining the Effect of New Legislation on Consumer Protection for "High Cost Mortgages", 25 Real Est. L. J. 40 (1996). This article describes how the Homeownership and Equity Protection Act of 1994 addresses the problem of "reverse redlining". There is a specific emphasis on how the Act is designed to protect consumers involved in home equity transactions from predatory loan practices. Robert Weill & Pelis Thottathil, Real Property: Revisiting Takings, Assumptions, and Reverse Mortgages, 24 Real Est. L. J. 333 (1996). The authors argue that the Supreme Court's decision in Fidelity Federal Savings and Loan Ass'n v. de la Cuesta created unreasonable restraints on the alienation of property. Specifically, they argue that the restrictions placed on the ability to assign a mortgage constitute a taking within the meaning of the Fifth Amendment.
IX. PLANNING, ZONING AND LAND USE

Melissa Waller Baldwin, Conservation Easements: A Viable Tool For Land Preservation, 32 Land & Water L. Rev. 89 (1997).

The article discusses the options available to people who want to keep land in its current state for sentimental, scenic, or recreational reasons. While several options for private citizens and groups are discussed, the focus is on conservation easements, since they are commonly available statutorily, and are easy to use. The author points out the advantages and disadvantages of conservation easements as well as several components that are useful to include in conservation easements.
X. TAXATION

Gerald Korngold, Comparing the Concepts of "Property" and "Value" in Real Estate Law and Real Property Taxation, 25 Real Est. L. J. 7 (1996).

The article analyzes the public policies and practical concerns that influence the judicial definitions of property and value. The author argues that the benefit of context-based meanings of the two terms must be balanced against the social costs of clashing definitions. Willys H. Schneider, U.S. Tax Rules Affecting Foreign Investors in REITS, 24 J. Real Est. Tax'n 40 (1996). The author examines the operation of United States tax rules with regard to foreign owners of equity interests in REITS. In addition to examining the Internal Revenue Code's take on REITS, the author analyzes the impact of various international tax treaties on foreign investors. Robert S. Siegel and Mary B. Doyle, Sales of Real Estate With Contingent Payment Debt, 24 J. Real Est. Tax'n 243 (1997). The article analyzes recently promulgated IRS regulations which address the federal income tax treatment of debt instruments that provide for contingent payments. Specifically, the article focuses on the impact these regulations have on real estate transactions involving nonpublicly traded debt. Gregory F. Wilder and William M. Shaheen, Tax Considerations in Eminent Domain Proceedings, 24 J. Real Est. Tax'n 51 (1996). This article analyzes some of the tax issues involved in eminent domain proceedings. It focuses on whether a transfer of property under eminent domain qualifies for tax deferral and on the tax treatment of professional fees incurred in condemnation proceedings. XI. VENDOR AND PURCHASER, REAL ESTATE CONTRACTS AND BROKERS

Roy T. Black, Client Liability to Real Estate Brokers: From Contract to Punitive Damages, 25 Real Est. L. J. 78 (1996).

This article discusses the various theories through which clients can become liable to real estate brokers, including agency, contract, and tort theories. Karen Eilers Lahey & David A. Redle, The Ohio Experience: The Effectiveness of Mandatory Real Estate Disclosure Forms, 25 Real Est. L. J. 319 (1997). The authors use an empirical study conducted in Ohio to analyze the effectiveness of disclosure requirements. They further analyze the evolution of liability and the development of disclosure laws, while discussing the effectiveness of disclosure legislation in jurisdictions outside Ohio. Jay M. Feinman, Economic Negligence in Residential Real Estate Transactions, 25 Real Est. L. J. 110 (1996). The article discusses the liability of third-party participants, such as pest inspectors and surveyors, in real estate transactions. The author argues that these different instances of liability can best be understood by viewing them as apart of the field of law known as economic negligence. Katherine A. Pancak et al., Real Estate Agency Reform: Meeting the Needs of Buyers, Sellers and Brokers, 25 Real Est. L. J. 345 (1997). The article examines the recent changes to the laws affecting real estate brokerage relationships. The authors argue that the changes are necessary and analyze the various legal systems created to address the problems. They also summarize the agency legislation of all fifty states. Katherine Pancak et al., Residential Disclosure Laws: The Further Demise of Caveat Emptor, 24 Real Est. L. J. 291 (1996). The article discusses residential real estate disclosure laws. It first examines the legal requirements for brokers and then moves into a discussion of the legal requirements for sellers. After examining the economic and legal implications of requiring mandatory seller disclosure, the authors finish with some practical tips for all parties involved in a residential real estate transaction.
XII. WATER, WATER RIGHTS AND WETLANDS

Michael C. Blumm & Thea Schwartz, Mono Lake and the Evolving Public Trust in Western Water, 37 Ariz. L. Rev. 701 (1995).

The authors analyze the public trust doctrine in Western water law by reviewing the Mono Lake case and its effects on the Mono Lake Basin. While a large part of the discussion revolves around the public trust doctrine's role in reallocating water supplies in the San Francisco Bay-Delta and the American River, attention is also given to the public trust in water in other Western states. Gregory S. Weber, Articulating the Public Trust: Text, Near-Text and Context, 27 Ariz. St. L. J. 1155 (1996). The article analyzes the administrative, legislative, and judicial articulation of the public trust doctrine, as it has been applied to diversions from surface waterways in California following the California Supreme Court's decision in National Audubon Society v. Superior Court. The author discusses the impact that National Audubon has had on the development of the public trust doctrine in California, and concludes that California has entered a new era of trust-induced water reallocations.
XIII. MISCELLANEOUS

June Carbone, Dukeminier and Krier as Narrative: The Stories We Tell in the First Year Property Course, 32 Hous. L. Rev. 723 (1995).

The author discusses the role of storytelling as a methodology for teaching law school courses. Specifically, she discusses the narrative that Dukeminier and Krier use to tie their property casebook together in a way that makes for a compelling and cohesive story. The author compares Dukeminier's and Krier's presentation with critiques presented in their third edition and Singer's new casebook before discussing the possibilites for teaching law in a less linear fashion. Bradley R. Carter, Reviewing an Appraisal: An Attorney's Guide to Preparing for Battle, 25 Real Est. L. J. 28 (1996). The article explores the importance of written reports prepared by appraisers before they testify as expert witnesses. It also provides attorneys who are preparing expert witnesses in the area of appraisals with a guide as to how to best prepare them to testify.