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.
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.
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
follow real estate law professionally or as a hobby, you'll find something new
and useful every week in Real Cases in Real Estate.
for week of Sept 20th, 2010
Authors Note: This
week's cases demonstrate the importance of following each and every requirement
in foreclosure proceedings. As the housing and foreclosure crisis continues,
various protective aspects of state foreclosure laws are being invoked
defensively by distressed homeowners and courts sympathetic to them.
Non-compliance with the foreclosure laws is increasingly likely to lead to
invalidated foreclosure sales or dismissal of foreclosure complaints.
Property Owners Holding Title as Tenants in Common are Entitled to Separate,
Individual Notices of Foreclosure or the Foreclosure Sale is Void.
Sy Nguyen and Lyly Nguyen owned two separate parcels of land in Seattle,
which comprised a single residential property, with a house on one of the
parcels and a garden on the other. They conveyed the property to Van, but by
mistake only one of the two parcels was described in the deed from the Nguyens
to Van. The parcel that was not conveyed was the subject of delinquent real
estate taxes. Eventually, King County foreclosed its tax lien and the parcel
The Nguyens attempted to vacate the foreclosure sale on the grounds they
did not receive proper notice; since they held title as tenants in common, they
said they were entitled to separate notices of the sale and Kings County sent
only a single notice addressed to the two of them. Washington statutes are
clear that the "person or persons whose name or names appear on the treasurer's
rolls as the owner or owners" are entitled to notice. The Washington Supreme
Court has held that failure to comply with the statutory notice provisions
constitutes a defect that deprives the court of jurisdiction over a tax
foreclosure. This decision observes that "one cannot safely assume that all
tenants in common will live at the same address or that they will all see the
One possible outcome is that the foreclosure could be upheld against the
person who received the notice and not against the person who did not, but in
this case, the court concluded that the entire foreclosure proceeding was void.
The assignee of the tax sale purchaser argued that the sale should be upheld
based on the county's "substantial compliance" with the notice statute, but the
court disagreed, because a single notice addressed to two separate owners "did
not even amount to substantial compliance."
Lexis.com subscribers can view the enhanced version of Homeowners
Solutions, LLC v. Nguyen, 148 Wn. App. 545 (Wash. Ct. App. 2009)
Non-subscribers can use lexisOne's Free Case Law
search to view the free, un-enhanced version of Homeowners Solutions, LLC v. Nguyen, 148 Wn. App. 545 (Wash.
Ct. App. 2009)
Assignee of a
New York Mortgage That Does Not Submit Evidence of Ownership of the Promissory Note
Lacks Standing to Foreclose the Mortgage.
Deutsche Bank National Trust Company, as trustee,
filed a foreclosure complaint. The plaintiff failed to submit evidence of
assignment of the mortgage note. The decision in this case applies New York law
to determine whether the plaintiff in a foreclosure lawsuit has standing to
foreclose, in the context of recent laws designed to protect New York
homeowners during the residential foreclosure crisis.
In 2008, New York adopted a law that requires a voluntary conference
between the lender and borrower, at the borrower's request, before a high-cost
or subprime mortgage can be foreclosed if the mortgaged property is occupied by
the borrower. In 2009, the law was amended to require that the parties
negotiate in good faith at the settlement conference.
In addition, the real property law was recently amended to require
mortgagees to affirmatively allege in a foreclosure proceeding that they own
the note and mortgage. Earlier, in 2006, New York adopted a law (the Home
Equity Theft Prevention Act) that requires the foreclosing party to provide a
specific notice to the homeowner about assistance with the foreclosure process.
All these laws are intended to preserve "the precious asset of home equity."
Despite laws intended to put brakes on residential foreclosures, the
plaintiff in this case filed a foreclosure suit without demonstrating that it
had legal ownership of the note. The foreclosure complaint stated "upon
information and belief" that the plaintiff held the mortgage. The New York
court said this statement did not satisfy the requirement for an affirmative
allegation of ownership. Moreover, the note presented was not endorsed, and
"absent assignment or delivery of the note, the assignment of a mortgage is a
nullity" in New York. The foreclosure complaint was dismissed without
Lexis.com subscribers can view the enhanced version of Deutsche
Bank Nat'l Trust Co. v. McRae, 2010 NY Slip Op 20020 (N.Y. Sup. Ct. 2010)
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