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 the Week of January 10th, 2011
Mortgage Law Doesn't Provide a Private Right of Action Against the Lender.
Brown was 93 years old when her son took out a reverse mortgage on her
condominium and converted the proceeds of the mortgage to his own use. Through
her guardian, Dottie sued her son and his girlfriend and the reverse mortgage
lender. Between the time Dottie signed the power of attorney to her son and the
time of the closing of the reverse mortgage, she suffered a stroke that
rendered her mentally incompetent. Three days after the stroke she was placed
in a long term care facility.
reverse mortgage agreement required Dottie to live in the property secured by
the mortgage, but at the time of the closing, she had already been
institutionalized. Nevertheless, acting under the power of attorney, her son
signed the mortgage documents, and deposited $198,000 of the loan proceeds in a
joint account he shared with his mother. He then transferred $20,000 into his
girlfriend's account and $150,000 into his own.
guardian sued the reverse mortgage lender for violation of federal reverse
mortgage laws, but the Washington appeals court found that the reverse mortgage
program, 12 U.S.C. §1715z-20, does not provide a private right of action
against lenders for violations of the reverse mortgage law. Neither the
language of the statute nor any "rights-creating" language support private
lawsuits against lenders for violation of this law. The guardian also sued the
lender under the state Consumer Protection Act, but this claim was also
dismissed, because the lender's alleged complicity in allowing the son to
commit fraud against his mother did not have the capacity to deceive a
substantial portion of the public.
guardian was left with only her claims against Dottie's son and his girlfriend.
subscribers can view the enhanced version of Brown
v. Brown, 157 Wn. App. 803 (Wash. Ct. App. 2010)
can use lexisOne's Free Case Law search to view the free, un-enhanced version
of Brown v. Brown, 157 Wn. App. 803 (Wash. Ct. App. 2010)
its Equitable Powers, a Minnesota Court Reforms a Deed.
and Norman Erdman owned lakefront property in Minnesota which they intended to
convey to their son and daughter-in-law, Wayne and Kathy, subject to the rights
of their other children to use the land for 50 years. They signed three
documents to achieve their purpose, but one of these, a general warranty deed,
recorded before the lease, had the effect of voiding the lease rights of
eight children of the Erdmans testified in the case, saying they were aware of
the intended conveyance to Wayne and their parents' intention that they be able
to use the property for 50 years. The Erdman siblings had used the property
regularly for many years before Wayne decided to build on the property. The
Minnesota appeals court reformed the deed, concluding that even though the deed
was recorded prior to the lease, the deed did not express the grantors'
understanding that all their children would have the right to use the property
under a lease.
warranty deed resulted from a mutual mistake of the parties, said the court.
Wayne and Kathy claimed they were not mistaken in accepting the deed, but their
testimony was not credible because they acted inconsistently with their desire
to exclude their siblings by renting to them for 27 years before announcing
their intention to build.
court upheld reformation of the deed, holding it subject to the 50-year lease
to the group of siblings. Wayne and Kathy's argument based on violation of the
Minnesota recording act also failed, because the recording law protects bona
fide purchasers, a description inapplicable to them based on their personal
knowledge of the rights of others to the property.
subscribers can view the enhanced version of Pellman
v. Erdman, 2010 Minn. App. Unpub. LEXIS 226 (Minn. Ct. App. Mar. 16, 2010)
can access State Case Law, Codes, Full Jurisdictional Shepard's® Citations and
more using lexisOne's Research Value Package.