Justia Real Estate & Property Law Opinion Summaries

A mobilehome park owner challenged the constitutionality of Civil Code section 798.30.5, which limits annual rent increases for certain mobilehome parks located within the jurisdictions of two or more incorporated cities in California. The statute, effective from January 1, 2022, to January 1, 2030, restricts rent increases to the lower of 3 percent plus the percentage change in the cost of living, or 5 percent, and limits the number of rent increases within a 12-month period. The owner alleged that the statute is facially unconstitutional because it lacks a procedural mechanism for property owners to seek rent adjustments to ensure a fair return, arguing this omission violates due process and results in an uncompensated taking.The Superior Court of Orange County granted the owner’s motion for judgment on the pleadings, finding that the absence of a process to seek exceptions to the rent ceiling violated due process and rendered the statute unconstitutional. The court rejected the owner’s takings argument but concluded that the statute’s plain language was undisputed and denied the State’s request for leave to amend its answer, determining that any amendment would be futile.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case. The appellate court held that the owner failed to demonstrate that the statute is facially unconstitutional, clarifying that a fair return adjustment mechanism is not required for all rent control laws to be constitutional, but may be necessary only if the law is confiscatory in its application. The court also found that the State’s general denial in its answer placed the owner’s standing to sue at issue, precluding judgment on the pleadings. Accordingly, the appellate court reversed the judgment in favor of the owner. View "Anaheim Mobile Estates v. State" on Justia Law

A mobilehome park owner challenged the constitutionality of a California statute that limits annual rent increases for certain mobilehome parks located within the jurisdictions of two or more incorporated cities. The owner argued that the statute is facially unconstitutional because it lacks a procedural mechanism allowing property owners to seek rent increases above the statutory cap to ensure a fair return, which the owner claimed is required by the California and U.S. Constitutions. The owner asserted that the absence of such a mechanism results in a violation of due process, equal protection, and the prohibition against uncompensated takings.The Superior Court of Orange County granted the owner’s motion for judgment on the pleadings, finding that the statute’s failure to provide a process for seeking exceptions to the rent cap violated due process and rendered the statute unconstitutional. The court rejected the owner’s takings argument but concluded that the legal issue was dispositive and denied the State’s request for leave to amend its answer. Judgment was entered in favor of the owner, and the State appealed.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case. The appellate court held that the owner failed to establish that the statute is facially unconstitutional, as the relevant legal precedents do not require a fair return adjustment mechanism in every rent control law. The court also found that the State’s general denial in its answer placed the owner’s standing at issue, precluding judgment on the pleadings. The court reversed the judgment of the trial court, holding that the absence of a fair return adjustment mechanism does not, by itself, render the statute facially unconstitutional, and that the State’s answer raised material issues that should have prevented judgment on the pleadings. View "Anaheim Mobile Estates v. State" on Justia Law

After Hurricane Harvey caused significant flooding at the Arbor Court apartment complex in Houston in 2017, the property’s owner, DM Arbor Court, Limited (DMAC), sought permits from the City of Houston to repair the damage. The City denied these permits, invoking a provision of its flood control ordinance that had not previously been used for such denials. The City determined that a majority of the complex’s buildings had sustained “substantial damage,” requiring costly elevation before repairs could proceed. As a result, DMAC was unable to repair or redevelop the property, which led to the loss of tenants and the property sitting idle.DMAC filed suit in the United States District Court for the Southern District of Texas, alleging that the City’s denial of repair permits constituted an unconstitutional taking under the Fifth Amendment. The district court dismissed the case as unripe, but the United States Court of Appeals for the Fifth Circuit reversed, finding the case ripe once the City’s Director of Public Works formally denied the permit application. On remand, after a bench trial, the district court rejected DMAC’s takings claim, concluding that the property retained some economic value and that DMAC was not deprived of all economically beneficial use. The court also found that the City’s actions were justified under the Penn Central framework, emphasizing the public interest in flood management.On appeal, the United States Court of Appeals for the Fifth Circuit held that the City’s denial of the repair permit deprived DMAC of all economically viable use of Arbor Court, constituting a categorical taking under Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). The Fifth Circuit reversed the district court’s judgment and remanded the case for further proceedings, holding that the City’s regulatory action amounted to a per se taking requiring just compensation. View "DM Arbor Court v. City of Houston" on Justia Law

A property owner challenged the tax assessment of its facility in Salisbury, Vermont, for the 2023-2024 tax year. After a grievance hearing attended by both the property owner and its attorney, the town listers denied the grievance and mailed the decision by certified mail to the property owner’s address of record. The property owner received the notice twelve days before the deadline to appeal but did not forward it to its attorney until after the appeal period had expired. The attorney then filed an appeal to the Board of Civil Authority (BCA), which was rejected as untimely.The property owner appealed to the Vermont Superior Court, Addison Unit, Civil Division, arguing that the town violated its procedural due process rights by failing to send notice of the listers’ decision to both the property owner and its attorney. The Superior Court allowed the property owner to amend its complaint and ultimately granted summary judgment in its favor, relying on Perry v. Department of Employment & Training, which required notice to both a claimant and their attorney in the context of unemployment benefits. The court ordered the BCA to hear the untimely appeal.The Vermont Supreme Court reviewed the case and held that, in the context of property tax grievances, procedural due process does not require notice to be mailed to both the taxpayer and the taxpayer’s counsel. The Court distinguished Perry as limited to unemployment-benefit proceedings and found that the statutory scheme for property tax appeals only requires notice to the taxpayer. Because the property owner received actual notice and had sufficient time to appeal, the Court concluded that due process was satisfied. The Supreme Court reversed the Superior Court’s decision and instructed that summary judgment be entered for the Town of Salisbury. View "Salisbury AD 1, LLC v. Town of Salisbury" on Justia Law

A Michigan landlord who owns several rental properties in Oak Park challenged the city’s housing code, specifically its requirement that landlords consent to property inspections as a condition for obtaining a rental license. The city’s code mandates that landlords apply for a license and certificate of compliance, which involves an initial inspection and periodic re-inspections. The landlord refused to sign the consent form for inspections, resulting in the city withholding his license and issuing fines for renting without one. Despite these penalties, he continued to rent out his properties.The United States District Court for the Eastern District of Michigan granted summary judgment in favor of the city. The district court found that the landlord lacked standing to bring a Fourth Amendment claim because there had been no warrantless, nonconsensual inspection. It also ruled that the city’s licensing and inspection regime did not violate the Fourth Amendment or impose unconstitutional conditions, and that the landlord’s Equal Protection claim was without merit.On appeal, the United States Court of Appeals for the Sixth Circuit held that the landlord did have standing to challenge the licensing scheme under the unconstitutional-conditions doctrine, as the denial of a license for refusing to consent to inspections constituted a cognizable injury. However, the court concluded that the city’s requirement of consent to an initial inspection as a condition of licensing was reasonable and did not violate the Fourth Amendment, drawing on Supreme Court precedent distinguishing between reasonable conditions for public benefits and coercive mandates. The court also found that the city’s inspection requirements for one- and two-family rentals did not violate the Equal Protection Clause, as the classification was rationally related to legitimate public health and safety goals. The Sixth Circuit affirmed the district court’s judgment. View "Herschfus v. City of Oak Park" on Justia Law

Fletcher Properties, Inc. and other appellants own multi-tenant residential properties in Minneapolis. The City of Minneapolis enacted an ordinance prohibiting property owners from refusing to rent to individuals based on requirements of public assistance programs, including Section 8 housing vouchers. Fletcher challenged the ordinance, claiming it violated the Minnesota Constitution’s Takings Clause and was preempted by the Minnesota Human Rights Act (MHRA).The district court initially ruled in favor of Fletcher, finding the ordinance violated due process and equal protection clauses. The court of appeals reversed this decision, and the Minnesota Supreme Court affirmed, remanding the case to address the remaining claims. On remand, the district court granted summary judgment for the City, rejecting Fletcher’s takings and preemption claims. The court of appeals affirmed this decision, leading to the current appeal.The Minnesota Supreme Court reviewed the case and held that the ordinance does not constitute a physical or regulatory taking under the Minnesota Constitution. The court applied the Penn Central factors, concluding that the economic impact of the ordinance, interference with investment-backed expectations, and the character of the government action did not support a finding of a regulatory taking. The court also determined that the ordinance does not effect a physical taking as landlords voluntarily rent their properties and are not compelled to continue doing so.Additionally, the court held that the ordinance is not preempted by the MHRA. The court found no conflict between the ordinance and the MHRA, as the MHRA does not grant landlords an affirmative right to reject voucher holders. The court also concluded that the MHRA does not occupy the field of housing discrimination based on public assistance, allowing for local regulation.The Minnesota Supreme Court affirmed the decision of the court of appeals, upholding the ordinance. View "Fletcher Properties, Inc. vs. City of Minneapolis" on Justia Law

Plaintiffs, who owned real property in Southfield, Michigan, became delinquent on their property taxes between 2012 and 2014. Oakland County foreclosed on their properties under the General Property Tax Act (GPTA). The plaintiffs had the opportunity to redeem their properties by paying the delinquent taxes, but they failed to do so. Consequently, the properties were foreclosed, and the city of Southfield exercised its right of first refusal to purchase the properties for the minimum bid, which included the unpaid taxes and associated fees. The properties were then conveyed to the Southfield Neighborhood Revitalization Initiative (SNRI).The plaintiffs filed a class action lawsuit in the Oakland Circuit Court, alleging violations of their constitutional rights, including the Takings Clauses of the Michigan and United States Constitutions. The trial court granted summary disposition in favor of the defendants, citing lack of jurisdiction, lack of standing, and res judicata. The Michigan Court of Appeals affirmed the trial court's decision. However, the Michigan Supreme Court vacated the Court of Appeals' decision and remanded the case for reconsideration in light of its decision in Rafaeli, LLC v Oakland Co, which held that retaining surplus proceeds from tax-foreclosure sales violated the Takings Clause of the Michigan Constitution.On remand, the trial court again granted summary disposition to the defendants, but the Court of Appeals reversed in part, holding that Rafaeli applied retroactively and that the plaintiffs had valid takings claims. The Michigan Supreme Court reviewed the case and held that a taking occurs when a governmental unit retains property without offering it for public sale and the value of the property exceeds the amount owed in taxes and fees. The Court also held that MCL 211.78m, as amended, applies prospectively, while MCL 211.78t applies retroactively but does not govern this case. The case was remanded to the trial court for further proceedings. View "Jackson v. Southfield Neighborhood Revitalization Initiative" on Justia Law

Brian and Susan Fernaays own a house on lot 31 in Brewers Creek Subdivision, Isle of Wight County, Virginia. A 20-foot drainage easement, shared with lot 32, contains an underground stormwater drainage pipe that has deteriorated over time, causing significant erosion. The Fernaayses estimate the repair cost at $150,000 and sued Isle of Wight County, claiming the County owns the easement and is responsible for maintaining the pipe. They argued that the County's failure to maintain the pipe resulted in an unconstitutional taking of their property under both the Virginia and U.S. Constitutions.The United States District Court for the Eastern District of Virginia reviewed the subdivision plat and the Declaration of Covenants and Restrictions. The court found that the easement was not dedicated to the County, meaning the County had no duty to maintain the drainage pipe. Consequently, the court granted summary judgment in favor of the County.The United States Court of Appeals for the Fourth Circuit affirmed the district court's decision. The appellate court concluded that the Brewers Creek Partnership did not unequivocally dedicate the drainage easement to the County. The court noted that the plat and the Declaration of Covenants and Restrictions did not manifest an intent to dedicate the easement or the pipe to the County. The language in the documents suggested that the easements were for the benefit of the lot owners and that the County was only permitted to use them, not obligated to maintain them. Therefore, the County was not responsible for the damage, and the Fernaayses, as property owners, would have to bear the maintenance costs. The judgment of the district court was affirmed. View "Fernaays v. Isle of Wight County" on Justia Law

Owners of timeshare estates in a resort sued the County of Riverside, challenging the legality of an annual fee charged for separate property tax assessments. The owners argued that the fee exceeded the reasonable cost of providing the assessment, constituting a tax that required voter approval, which had not been obtained. The trial court rejected the owners' argument and ruled in favor of the County.The Superior Court of Riverside County entered judgment for the County, finding that the fee did not exceed the reasonable cost of providing the separate assessment. The court considered various costs, including those related to a new computer system and assessment appeals, even though these costs were not included in the original budget used to set the fee.The Court of Appeal, Fourth Appellate District, Division One, State of California, reversed the trial court's decision. The appellate court held that the County did not meet its burden to prove that the $23 fee was not a tax requiring voter approval under Article XIII C of the California Constitution. The court found that the County's methodology for setting the fee was flawed, as it included costs unrelated to the specific service of providing separate timeshare assessments and did not accurately reflect the actual cost of the service. The court also ruled that the trial court erred in considering costs incurred after the fiscal year used to set the fee.The appellate court remanded the case for further proceedings to determine the appropriate refund amount and to decide on the declaratory, injunctive, and/or writ relief sought by the owners. The County must prove the reasonable and necessary costs of providing the separate assessment service, excluding costs for valuing the timeshare project as a whole. View "Scott v. County of Riverside" on Justia Law

This case involves a property on Maui in which Wade Brady owned a 50% interest. Beverly and James Spence obtained a default judgment against Wade and Katherine Brady in 2010, which they recorded as a lien against Wade Brady’s interest in the property. After the Bradys failed to satisfy their debt, the Spences obtained a writ of execution to sell the property. The sale was advertised by publication, and Wade Brady’s interest was sold to the Spences. At the time of the sale, Peter J. Winn and Westminster Realty, Inc. (the Winn parties) also had a recorded junior judgment lien on the property but did not receive personal notice of the sale.The Circuit Court of the Second Circuit confirmed the sale, stating it was free of all junior liens. The Winn parties later sought to execute their judgment on the property, but the circuit court denied their motion, stating they were not entitled to personal notice. The Intermediate Court of Appeals (ICA) vacated the circuit court’s order, holding that the Winn parties had a constitutionally protected property interest and were entitled to personal notice of the sale.The Supreme Court of the State of Hawai‘i reviewed the case. The court held that a recorded judgment lien under HRS § 636-3 creates a constitutionally protected property interest. The court further held that due process requires personal notice to junior judgment lienholders when the executing party knows or should know of their interest. However, the court decided that this ruling would apply prospectively only, due to the potential impact on prior and pending execution sales and the substantial prejudice to the intervenors. The court reversed the ICA’s decision to reinstate the Winn parties’ lien on the property. View "Winn v. Brady" on Justia Law