Real Cases in Real Estate By Andrea Lee Negroni, Esq. - July 26th Update

Real Cases in Real Estate By Andrea Lee Negroni, Esq. - July 26th Update

REAL CASES IN REAL ESTATE

By Andrea Lee Negroni, Esq.

BuckleySandler LLP

alnegroni@buckleysandler.com

Real Cases in Real Estate is a weekly update on real estate law, with legal principles illustrated and explained by lawsuits from around the country. The topics are wide-ranging for appeal to a broad spectrum of readers including lawyers, homeowners, investors and the general public. Andrea Lee Negroni, a Washington DC attorney and legal writer with 25 years of experience in financial services and mortgage law, contributes the case summaries.

Followers of Real Cases in Real Estate will learn and be entertained by lawsuits involving nuisance, trespass, zoning violations, deed restrictions, title insurance, public utilities, mechanics liens, construction defects, adverse possession, foreclosure and eviction, divorce and marital property rights, tenants' rights, and more. Real Cases in Real Estate uncovers the unpredictable, amusing, and sometimes outrageous disputes between next-door neighbors, contractors and homeowners, condo boards and residents, real estate brokers and homebuyers, and zoning administrators and developers.

Each fully cited case summary highlights the essential law of the case and explains the principal legal theories and concepts relevant to the outcome. Plain language treatment makes Real Cases in Real Estate accessible to lawyers and laymen alike.

Whether you follow real estate law professionally or as a hobby, you'll find something new and useful every week in Real Cases in Real Estate.

 

Updates for week of July 26th, 2010

Owners Recover Damages for Diminution of Value When Property is Saturated by Sewage Backup

The Smiths owned a home in Kentucky. The Mountain Water District installed a new sewer system by building the new system above an existing sewer system. During the construction of the new system, a pipe from the old system broke, and sewage saturated the Smiths' property. A tank was connected to the old sewer system so the Smiths filled the tank with concrete at the suggestion of county officials, who thought the sewage had backed up in the tank. The concrete remedy did not work and the sewage reappeared on their property.

The Smiths sued Mountain Water for diminution in value of their property, which was estimated at $15,000 in 2006 and $50,000 in 2008. Mountain Water defended by claiming the Smiths had not introduced evidence of the cost to repair the damage. Mountain Water's position was that the true measure of damages was the lesser of the cost to repair the damage and the diminution of value. A jury awarded the Smiths $30,000 and Mountain Water appealed. The Kentucky court decided that the Smiths did not have to prove repair costs if the damage could not be repaired and they were not seeking repair costs as damages.

Since the Smiths were unable to repair the damage, there was no dollar amount of damages applicable to repairs. In their lawsuit, they sued for only the amount by which their property value was reduced. The court upheld the jury verdict on the grounds that the choice of repair costs or diminution in value could not be applied when the property owners did not seek repair costs.

Mountain Water District v. Smith, Ky. App. No. 2008-CA-002369-MR, May 21, 2010; online at http://opinions.kycourts.net/coa/2008-CA-002369.pdf   

 

In Granting a Variance, the Village of Schaumberg Illinois is Not Required to Comply with its Zoning Code.

Zoning in the Village of Schaumberg requires homes on lots zoned R-6 to maintain back yards of 30 feet. Mr. and Mrs. Wehmeier applied for a variance to build a patio room in their rear yard, despite its leaving only 19 feet of rear yard. The zoning regulations allowed the Village to grant a variance if strict application of the rules would present practical difficulties or hardship for a property owner. The Wehmeiers got the variance over the objections of their adjacent neighbor, Deborah Dunlap. Dunlap sued the Wehmeiers and the Village in an attempt to prevent unlawful land use. The case helps explain the difference between administrative and legislative zoning decisions.

The Village and the Wehmeiers said that since the variance was granted, there was no "unlawful" land use, and that Dunlap had no legal right to sue the Village anyway. This case provides an interesting (if long-winded) discussion of whether the granting of zoning variances is a legislative act or an administrative act. The significance of the distinction is that a legislative act is subject to judicial review only if it was arbitrary or violated substantive due process, but an administrative act (a quasi-judicial act) is subject to greater judicial scrutiny. When a municipality makes an administrative zoning decision, it must follow the zoning regulations, but if it makes a legislative decision, it need not strictly adhere to these regulations.

Whether zoning decisions are legislative decisions or administrative decisions requires some background, which the decision fortunately provides. An administrative decision affects "a small number of persons on individual grounds based on a particular set of disputed facts that were adjudicated." A legislative decision, on the other hand, involves "general facts affecting everyone." Illinois courts generally consider zoning decisions to be legislative, and they are upheld by courts if they represent a "rational means to accomplish a legitimate purpose, as long as a fundamental right is not implicated." The distinction is intended to reduce the likelihood of success to challenges to the issuance of zoning variances.

Dunlap also claimed that the Village hadn't proved that the Wehmeiers would have had a hardship if the variance had not been granted. However, since Dunlap started the lawsuit, she was the person seeking relief from the variance. Therefore it was up to her, not the Wehmeiers, to show that the variance was unreasonably granted. The burden of proof in challenging the variance is on the challenger, not the Village.

The variance was upheld, because it was not found to be arbitrary or unreasonable and it had no substantive relationship to the public health, safety, morals, comfort or general welfare of the public.

Lexis.com subscribers can view the enhanced version of Dunlap v. Village of Schaumberg, 915 N.E.2d 890, 394 Ill. App. 3d 629 (Sept. 25, 2009)

Non-subscribers can use lexisOne's Free Case Law search to view the free, un-enhanced version of Dunlap v. Village of Schaumberg, 915 N.E.2d 890, 394 Ill. App. 3d 629 (Sept. 25, 2009)