Articles Posted in Real Estate

Residential subdivisions in Rhode Island often contain multiple lots that can only be reasonably accessed through a shared private driveway system, portions of which multiple residents or property owners are entitled to use for accessing their property. Disputes over which parts of a shared driveway are shared and which are private are common, and property owners sometimes obstruct or impede their neighbors from using a part of a shared driveway that the owner believes is entirely private. The Rhode Island Supreme Court recently upheld a superior court decision that enjoined a property owner from impeding their neighbor’s use of a portion of such a shared driveway.

The plaintiffs in the recently decided case are a family who purchased a home adjacent to the defendants in an eight lot subdivision that was accessed by a shared driveway system. The plaintiff’s property was situated closer to the public road than the defendant’s property and had two entrances to the shared driveway, a paved one closer to the road, and an unpaved entrance adjacent to the defendant’s property. Because the plaintiffs had a son with disabilities, a large school bus would come directly to the plaintiff’s home early in the morning on weekdays to pick him up in accordance with federal law. Because the shared driveway was narrow and situated on a steep grade, the school bus (as well as other utility or delivery vehicles servicing the plaintiffs) would use a part of the defendant’s driveway to back into the plaintiff’s driveway or turn around to descend the hill safely.

The defendants were bothered by the traffic of large vehicles with bright lights using part of their driveway to turn around and claimed that the plaintiffs had no right to allow the school bus to do so. The defendants erected a fence and a chain to impede any vehicles from using that portion of the driveway to help them access the plaintiff’s property safely. As a result of the defendant’s actions, the school bus driver was required to back directly down the long steep part of the hill, which was extremely difficult and resulted in the bus occasionally slipping off the road. The plaintiffs ultimately brought a case in Superior Court, alleging that there was an implied easement for their use of the portion of the defendant’s driveway that was necessary to safely turn around a large vehicle such as a school bus.

As state and municipal zoning and land use laws change and evolve, property owners can be placed in a difficult position if the intended use of their property becomes disallowed at some point because of the passage of a new law or regulation. To protect property owner’s rights, Rhode Island law permits owners to seek special use permits or other zoning variances which allow them to proceed with construction or other property uses which may not be permitted under current laws. The Rhode Island Supreme Court recently reversed a zoning board’s denial of a property owner’s application for a special use permit to construct a septic system and house on a parcel of real estate.

In the recently decided case, the plaintiff owned a parcel of land in the town of Charlestown, Rhode Island. The parcel, which was slightly larger than one acre, was originally created as part of a subdivision project in the 1970s. Since the plaintiff purchased the parcel, the town increased the required lot size for home construction to three acres, making the parcel nonconforming for development under the new regulations. In order to proceed with construction on the property, the plaintiff applied for a special use permit and dimensional variance to allow them to construct a septic system and place a house on the parcel. The plaintiff first obtained a permit from the Rhode Island Department of Environmental Management for the construction plans and later sought the permit and variance from the town zoning board.

Although the Department of Environmental Management had approved the plaintiff’s plans, the zoning board disagreed with their conclusion and refused to grant the plaintiff the requested permits, effectively stopping the construction plans. The plaintiff filed a lawsuit with the Superior Court, where the zoning board’s decision was upheld. The plaintiff appealed the Superior Court ruling to the state Supreme Court, arguing that the zoning board was required to accept the Department of Environmental Management’s decision to approve the construction of the septic system.

The real estate market across the United States has been on fire lately. According to a recent CNBC article, the median home price increased over 17 percent year-over-year to over $329,000. Rhode Island is no exception. According to a recent analysis from the online real estate company, Redfin, the median list price for a Rhode Island is $389,000. And while historically, on average, houses sold for slightly less than the list price due to buyer negotiating, that isn’t necessarily the case in today’s hot market.

To be sure, high home prices add to the challenges buyers face when seeking to purchase a home. However, the increasing sales prices are actually a function of another factor: a decrease in supply. As fewer homes are put on the market—and those that are put up for sale are quickly sold—the existing inventory of homes dwindles. Basic economics tells us that as supply decreases, prices will increase.

All this to say, the Rhode Island real estate market is competitive and buyers who want to end up with the house or property of their dreams need to be prepared to make a deal. Sellers are less likely to haggle over price or make the type of concessions they did decades ago. That said, buyers shouldn’t compromise on the important things, but shouldn’t insist on every aspect of the deal going their way, either.

Recently, a state appellate court issued an opinion in a Rhode Island real estate dispute, the facts of which were heavily in dispute. According to the plaintiff, he paid the defendant $150,000 over the course of ten years under the impression that all the money he paid to the defendant would be put towards the purchase of a certain piece of real estate. The defendant, however, maintained a vastly different story. According to the defendant, the money he received from the plaintiff was for his service as the plaintiff’s agent in the automotive business.

In 2015, the plaintiff filed an eight-count complaint against the defendant. Among the claims raised in the complaint were those of promissory estoppel, fraud, misrepresentation, and unjust enrichment.

Making the case more interesting is the fact that the defendant was a former state representative. The defendant filed a pretrial motion to preclude the plaintiff from mentioning this fact at trial; however, the court denied the motion.

The United States Constitution protects Rhode Island property owners from government intrusion or possession of their property under the Fifth Amendment. Also, it protects property owners from the unlawful seizure of property without just compensation under the Fourth Amendment. While these protections originally were created to protect against obvious and straightforward intrusions of the public’s property rights by the government, jurisprudence over the last 230 years has developed in a way to expand the protections offered by these constitution provisions, allowing property owners to challenge many government actions and regulations on constitutional grounds.

The U.S. Supreme Court recently heard arguments in a case from California that could expand the public’s right to challenge government regulations affecting business and property owners on these constitutional grounds. In the recently argued case, the plaintiff owns and operates an orchard for the production of fruit in California. The plaintiff has sued a quasi-government labor board, challenging regulations that permit union organizers to enter into the company property at certain times and solicit support for union membership and labor organization. The plaintiff sued the labor board, alleging that the permission granted by the regulations disrupted their business practices and amounted to a government-sanctioned trespass on their property without any compensation.

In the federal district court, the Plaintiff’s claim was dismissed because they did not allege facts that would show that the regulation had a meaningful effect on their possessory interests as a whole. The plaintiff appealed the district court ruling to the Ninth Circuit U.S. Court of Appeals, who ultimately upheld the district court decision, holding that the Defendant’s regulation only allowed controlled, nondisruptive visits that were limited in time, place and scope, and that the visits did not meaningfully affect the Plaintiff’s property interests.

The requirement that a court has jurisdiction–over both the parties and the issue of a legal dispute–is one of the first questions that a court asks when addressing a legal claim. Without valid jurisdiction over a party or the issue at hand, a court cannot grant the relief requested by the plaintiff. The Rhode Island Supreme Court recently affirmed a Superior court’s dismissal of a landlord-tenant dispute based on lack of jurisdiction. As a result of the ruling, the parties may not be able to obtain relief for their claims.

In the recently decided case, the plaintiff is a woman who owned a piece of property and leased it to the defendants for a period of two and a half years. After the defendants moved out of the property, the plaintiff withheld their security deposit and sought additional monetary damages from the defendants for damage allegedly caused to the property in violation of the lease agreement. The plaintiff filed a breach of contract claim with the Superior Court, making these allegations.

Although the defendants alleged counterclaims against the plaintiff’s lawsuit, they also challenged the plaintiff’s claim on jurisdictional grounds. The defendants argued that under Rhode Island law, landlord-tenant disputes fall under the jurisdiction of a housing court, or a District court in jurisdictions where a housing court is not available, and that a claim filed in Superior Court must fail as a matter of law. The Superior Court agreed, holding that the legislature specifically designated housing courts with authority to handle landlord-tenant disputes, and that the claim must be filed in the proper court for either party to obtain relief.

When properties are sold at auction after a foreclosure or other court-ordered liquidation, the terms and conditions of the sale are generally outlined in a contract that is known to potential bidders before the sale takes place. The party who is required to pay the costs, taxes, and fees related to the property and have accrued or continue to accrue before the title is exchanged should be discussed in the auction and purchase agreements. The Rhode Island Supreme Court recently ruled in favor of the purchaser of an auctioned home, who claimed that an unreasonable 17-month delay by the seller before closing should invalidate the terms of the contract requiring the buyer to pay all of the accruing costs before the closing.

The plaintiff in the recently decided case is an organization that purchased a home from the defendants at a foreclosure sale. According to the facts discussed in the judicial opinion, the parties entered into a contract after the sale that stated the closing should be within 30 days of the auction, and that while delays can and should be granted for good cause, that “time was of the essence.” Additionally, the contract stated that the buyer was responsible for any accruing taxes, fees, or costs associated with the home between the time of the sale and the closing. According to the buyer’s complaint, the seller delayed the closing for over 17 months, and although the buyer cooperated and allowed the delay to occur, when the seller notified the buyer of their responsibility to pay the costs that accrued over the 17 months, the buyer refused and filed a claim in the Superior Court.

The Superior Court judge summarily ruled against the buyer’s claim, finding that the contract language was clear that the buyer was responsible for accruing costs, and ruling that the buyer’s decision to allow the seller to delay the closing made it clear that the buyer was assuming responsibility for the costs. The buyer appealed the Superior Court decision to the Rhode Island Supreme Court, which disagreed with the lower court’s determination that the contract clearly required the buyer to pay all of the accruing costs under any circumstances. The court reversed the lower court’s ruling on the case, holding that there was a factual question of whether the defendant could be held responsible for payment of the fees if the 17-month delay was unreasonable, as the plaintiff claimed. As a result of the appellate ruling, the case will proceed toward a trial on the issues.

Rhode Island real estate disputes can become extremely complicated when multiple parties dispute multiple claims over a single piece of property. If several parties own a property and a dispute arises, all parties to the action must be diligent in bringing their claims properly and at the right time, in order to prevent the issues from being finally decided before a party can make their case. The Rhode Island Supreme Court recently ruled that the leaseholder of a marina was not able to pursue a claim against the owner of the marina, who had terminated their lease after the property was sold.

The plaintiff in the recently decided case was a company that leased a marina from the owners, who were defendants in the case. According to the facts discussed in the judicial opinion, the property was divided between several heirs in a previously adjudicated estate case. It was to be sold to liquefy the heirs’ interest in the property as part of the estate partition proceeding. Because of this condition, the plaintiff’s lease was contingent upon the property not being sold to a good-faith buyer, and the lease could be terminated if the property was, in fact, sold.

When the property was put up for sale, the plaintiffs attempted to purchase the marina outright, but were eventually outbid by family members of the owners, who are also named as defendants in the case. Before the sale went through, the plaintiffs challenged the new purchaser’s bid in court, arguing that their bid should be considered as better for the sellers. Ultimately, the plaintiff’s claim to reconsider the bidding process was rejected and the property was transferred to the new owners, and the plaintiff’s lease was terminated.

Buyers of a new or previously occupied home in Rhode Island may enjoy several distinct legal protections from loss in the event that the home they purchased is defective, unsafe, or has other unforeseen and expensive issues that must be resolved. In addition to any specific protections granted through the warranty provisions of a purchase contract, buyers may also seek remedy for the negligence of a previous owner, a contractor, an architect, or any other person or organization that completed faulty work on a home. Another protection that Rhode Island home buyers enjoy comes from the implied warranty of habitability, which protects any residential home buyer from an uninhabitable home irrespective of the language of the purchase contract. The Rhode Island Supreme Court recently issued a decision on a case concerning the implied warranty of habitability, which ultimately places concrete time limits on when such a claim can be pursued.

The plaintiffs in the recently decided case purchased a home from the defendant, who had constructed the home in 1997. The defendant represented that he was a professional home builder, and that the construction had been completed to the professional standard for a home in the area. In 2013, after noticing slight water damage in a part of their home, the plaintiffs had an inspection performed and learned that a significant portion of their home would need to be replaced because of water damage that would have been prevented if the home was properly constructed.

The plaintiffs sought damages from the defendant by filing a multi-claim lawsuit against the builder of the home. In addition to breach of contract and tort claims, the plaintiff made a claim based upon the implied warranty of habitability. At the trial level, all of the plaintiffs’ claims in contract and tort were barred by statutes of limitation, which would not allow such claims to proceed if made more than 10 years after the sale of the home. The plaintiff appealed the ruling on the implied warranty of habitability cause of action to the Rhode Island Supreme Court, arguing that the law was unclear, and that the 10-year time limit should not have started to run until the plaintiff discovered the defect in construction.