Articles Posted in Real Estate

Real estate purchase and sales agreements in Rhode Island are generally drafted and reviewed by several real estate law experts to ensure that each party’s rights and obligations are clear and unambiguous so that the contract can be easily enforced in the event of a breach or default. When contract terms are unclear or have more than one reasonable interpretation, this can lead to contract disputes that may ultimately cost more to the parties in legal fees than the disputed amount. The Rhode Island Supreme Court recently addressed cross-motions filed by parties to a real estate contract, which disputed the amount that the plaintiff would be allowed to subtract from the purchase price of the property based on agreed-upon renovations to the dock which the plaintiff demanded as a condition of the sale.

According to a judicial opinion released by the court hearing the dispute, the plaintiff agreed to purchase a dock from the defendant in 2017 for use in their petroleum distribution business. Because the dock at issue was not allowed to service boats over 90 ft, and the plaintiff’s use of the dock would require permission for boats up to 105 ft, the parties agreed in the real estate contract that the cost of repairs would be deducted from the purchase price. The parties included a provision that would adjust this division of responsibility in the event that the actual renovation cost either exceeded or fell short of an estimated amount.

After the project was completed, each party demanded payment from the other based on the purchase contract. The parties disputed which figure should be used for the “estimated amount” of renovation costs. The plaintiff and defendant each proposed a different estimated cost of renovation, with vastly different outcomes for each figure being used. Using the plaintiff’s numbers, they would be entitled to an overpayment of over $400,000, while using the defendant’s numbers would require the plaintiff to pay nearly $15,000 for underpayment. The plaintiff sued the defendant in the Superior court seeking $400,000, and the defendant countersued for the underpaid amount.

Over the last century, the Rhode Island coastline has evolved from large estates used for agricultural and industrial purposes into a vibrant, year-round beach destination. A necessary consequence of this development includes the subdivision of larger parcels into smaller lots for residential and commercial development. As larger beachfront parcels are divided into smaller lots, many properties that once included direct beach access have become landlocked from the coast.

The smaller lots that we see today often include rights of passage or other easements against beachfront properties to ensure that the owners and tenants of the now-landlocked properties maintain the right to access adjacent beaches. Present-day property owners who are fortunate enough to possess a property that directly abuts the coastline often oppose neighboring property owners and tenants using these rights of way to access the beach. The Rhode Island Superior Court recently issued a ruling in a case brought by a semi-oceanfront property owner against their oceanfront neighbor to determine if an easement existed for the plaintiff to cross through the defendant’s property when accessing the beach.

In 1986, the plaintiffs in the recently decided case purchased a lot in Narragansett that was across the street from the defendant’s lot, which directly abutted the beach. According to the purchase agreement and recorded deed for the plaintiff’s transaction, the plaintiffs’ property included an easement, established in 1929, for them to access the beach through the defendant’s property. The plaintiffs used the defendant’s property to access the adjacent beach without issue from 1986 until 2015. In 2015, the defendants constructed a barricade and refused the plaintiffs access to the beach, stating that no easement existed and that the plaintiffs were trespassing by using the defendants’ driveway for beach access.

Developing a large real estate project in Rhode Island can be a complicated, time-consuming, and expensive process. Securing financing and obtaining zoning and other permits can be tricky, and the success or failure of a proposed development often relies on the decisions of municipal councils, zoning boards, or other administrative bodies. A group of plaintiffs recently sued a Rhode Island town for its failure to timely and properly approve their plans to develop real estate within the town limits.

The plaintiffs in the recently decided case are a group of developers who sought to construct a nearly 1000-acre planned development in the town of Richmond, Rhode Island. The plaintiff’s development was to include a golf course, a clubhouse, outdoor recreation trails, a gun range, as well as a hotel. In 2011, the plaintiffs informally notified the Town that they were seeking to construct a gun range on the property, and discussed the plans at public hearings held by the town.

The plaintiffs discovered in 2014 that the town council had amended the municipal ordinances to prohibit gun ranges from being built on the type of property the plaintiff sought to develop. Two years later, the property was rezoned so that a gun range could be constructed on the property, and the plaintiffs resumed the pursuit of that goal. The plaintiffs secured conditional financing for the project and began selling memberships to the gun range before obtaining approval from the town. The town did not hold a public hearing on the plaintiff’s proposed construction until after the plaintiffs’ financing offer had expired, and the plaintiffs were not able to continue with the project.

The purchase, sale, and transfer of real estate assets in Rhode Island are governed by specific regulations and statutes that are designed to protect the rights of all parties to a sales agreement. Many things can happen between an agreement being reached and the closing that can derail a real estate transaction. For various reasons, buyers and sellers may wish to delay or cancel a purchase agreement after the contract has been signed. The Rhode Island Superior Court recently addressed a claim by the prospective buyers of a residential home against the seller, who had allegedly refused to continue with the transaction on the scheduled closing date.

The reasons that a party may wish to back out of a real estate transaction can vary. Sometimes, quick fluctuations in the market can discourage a party from following through with the transaction. If a buyer has trouble securing financing, it can also prevent a deal from going through. In the recently decided case, it is not clear why the defendant chose not to follow through on the sale of the property the plaintiffs were purchasing, but on the date of the closing, he backed out of the agreement. According to the facts discussed by the superior court, the plaintiffs were ready, willing, and able to follow through with the sale. The plaintiffs even had the full purchase price (over $600,000) waiting in escrow to complete the transaction.

Because the defendant refused to proceed with closing on the agreed-upon date, the plaintiffs pursued a breach of contract action in Rhode Island state court. State courts are allowed to grant equitable relief in real estate contract cases. Rather than awarding monetary damages as is usually done in response to a legal claim, a court grants equitable relief by forcing a party to perform a certain action. In this real estate contract case, the plaintiff was seeking an equitable remedy for the court to force the defendant to sell the property as agreed to in the real estate purchase contract.

Some of the most common types of cases currently coming through Rhode Island administrative boards and courts involve the request for a dimensional variance to expand or modify an existing home structure. As demonstrated in previous posts on our blog, the opinion of the municipal zoning board is given great deference by later courts when these decisions are appealed. Zoning boards consider a variety of factors when deciding whether to approve or deny a dimensional variance request. A recent zoning board decision that has been upheld by the Rhode Island Superior Court can demonstrate the best ways to make these points to the zoning board.

A dimensional variance is essentially a permit that is issued by a municipal zoning board in order to allow a property owner to build a structure on their property that would be forbidden under the existing zoning regulations of the municipality. Generally, variances are issued to allow construction that would violate the setback, height, area, or location requirements of the zoning ordinances. The plaintiff in the recently decided case was requesting a variance to allow him to add an addition to his home that would transform the structure from an “L” shape into a rectangular structure. The plaintiff requested the change because he was cohabitating with a new partner, as well as to support his desire to move his laundry facilities from the basement to the main floor as he got older and struggles with using the stars on a regular basis.

A neighbor of the plaintiff objected to his proposal at a public hearing, noting that the current regulations would not permit such a structure on the existing lot size. It is unclear why the neighbor opposed the petitioner’s proposal, but the zoning board considered several factors when unanimously approving the petitioner’s proposal in the face of the neighbors’ opposition. First, the zoning board noted that the petitioner’s proposal to “fill in the L” shape would not encroach any further on any neighbor’s property, so the prejudice to the neighbors was minimal by granting the request. Additionally, the zoning board noted that the petitioner’s growing family and issues related to aging were reasonable considerations in allowing the constriction to proceed. Finally, the board agreed with the petitioner, that the character of the neighborhood would not be negatively affected by granting the variance. As a result of these findings, the board issued the variance. The neighbor appealed the decision, but it was upheld by the state court upon review.

Rhode Island coastal communities often contain lots and structures of various sizes and shapes that have been developed inconsistently over time. As zoning, safety, and environmental regulations change, existing buildings may become noncompliant with current regulations. Although new regulations cannot generally be used to make a preexisting property illegal, owners who seek to renovate or change their existing non-compliant property must seek the approval of a municipal zoning board by applying for a dimensional variance or special use permit to proceed with construction. A Rhode Island state court recently addressed a Rhode Island property owner’s request to demolish their one-story home in Charlestown and construct a three-story home upon the same foundation.

The petitioner in the recently decided case purchased a single-story home as a vacation home in the coastal community of Charlestown in 2000. The petitioner sought to enlarge the house by demolishing the existing structure and building a multi-story dwelling in its place, for use as a primary residence. To comply with coastal and FEMA regulations that were issued since the construction of the original property, the petitioners would be required to fill in the basement of the existing home and could not have any habitations on the first floor of the structure. The petitioners sought approval from the Charlestown zoning board for a three-story structure that would be built upon the original foundation. One of the adjacent property owners objected to the petitioner’s request, in part because the proposed three-story structure would impede the neighbor’s view of the waterway.

A hearing was held on the petitioner’s proposal, where the parties each argued for and against the issuance of a dimensional variance to allow the construction to continue. The petitioner called witnesses who testified that the proposed construction was reasonable, and was the “least relief necessary” to meet the petitioner’s needs. The objector’s witnesses disputed the supporting testimony, arguing that the larger building was not within the character of the neighborhood and that the issuing of the request was not justified. After several hearings, the Charlestown zoning board decided to issue the petitioner’s request, finding that issuing the variance was necessary and reasonable for the petitioner and that the objectors’ arguments were more related to the view being blocked, and not relevant to the actual dimensional variance that was requested by the appellant. The Objectors appealed the zoning board’s decision to the Superior Court, where the lower decision was determined to be supported by the evidence on the record, and was ultimately upheld.

The increasing relevance and importance of renewable energy projects in Rhode Island and nationwide have led to conflicts between companies proposing the development of green energy projects and the owners of property adjacent to such proposals. Solar and wind energy projects generally take up less space and disrupt less environmental, commercial, and residential activity than fossil fuel-based energy production. Although green projects are less disruptive than facilities dedicated to fossil fuel-based energy generation, this does not mean that Rhode Island property owners want these projects in their backyards. Solar and wind farms can be unsightly and reduce neighboring property values. At the same time, the construction of large-scale green energy projects can be extremely disruptive to the communities in which they are being built. A Rhode Island court recently addressed an appeal filed by a solar energy company in response to conditions placed upon their project by a municipal zoning board.

The appellant in the recently decided appeal is a company that has sought approval for a photovoltaic solar energy system (PSES) within an area of Hopkinton, RI, that is zoned for manufacturing. To obtain approval for the project, the appeal needed to apply for a Development Plan Review (DPR) to the municipal zoning board for evaluation and approval. As part of the application process, the zoning board held public hearings to discuss the proposal. Many residents of Hopkinton testified at the hearing in opposition to the project. Residents expressed concerns about the amount of vegetation that would be removed as part of the construction. Residents also objected to the construction occurring outside of weekday business hours. The zoning board eventually approved the project, albeit with conditions that no vegetation in certain areas could be removed or modified, and that construction could not occur after 5 pm or on weekends.

The energy company appealed the imposition of the conditions to a board of appeals, and ultimately to the Rhode Island Superior Court. The Court agreed that the legal reasoning used by the zoning board did not justify the imposition of the challenged conditions on the appellant. The Court found that the zoning board had no right to forbid the appellant from modifying or removing vegetation from the areas at issue. Additionally, the court ruled that the working-hours restrictions could not be legally imposed based on the controlling laws and regulations when the application was made. As a result of the Court’s ruling, the appellant will be permitted to complete their project without the conditions initially imposed by the zoning board.

Towns and Cities in Rhode Island often adopt zoning ordinances in an attempt to preserve or direct the character of the municipality. These ordinances may limit the number of occupants to a dwelling, the number of families permitted in a single building, or even the total square footage of a home. In response to the proliferation of students moving into towns adjacent to colleges and universities, some municipalities have attempted to pass ordinances that prevent multiple students (or unrelated tenants in general) from occupying the same house. The Rhode Island Superior Court recently addressed a claim filed against the town of Narragansett by a group of landlords who challenged such an ordinance.

The ordinance in question was passed by Narragansett last year in response to townspeople’s concerns about the increasing numbers of houses that were being rented to groups of students attending the University of Rhode Island’s nearby Kingston campus. Supporters of the ordinance took issue with students having boisterous parties that disrupted the quiet character of the town, as well as outside landlords’ purchasing of properties to rent to students as “unofficial dormitories,” which resulted in an exodus of long-term residents. The ordinance passed prohibited any residence in the town from being rented to four or more college students unless the owner of the residence also resided there.

A group of landlords, student advocates, and property owners who opposed the ordinance filed a suit in state court, challenging the legality of the ordinance, as well as the procedure that the town followed to get it passed. The plaintiffs challenged several aspects of the ordinance’s passage, arguing that the town council did not allow all members of the public who desired to comment on the ordinance the opportunity to be heard. Additionally, the plaintiffs argued that the town did not follow a statutory requirement for passing such ordinances, by failing to refer the ordinance to the town planning board for consideration before voting and passing the regulation.

The increasing popularity and practicality of green energy production are causing conflicts between energy producers and rural residents nationwide and in Rhode Island specifically. Non-renewable energy production has commonly played a role in rural American life, through fossil fuel extraction and refining. The production of power using wind and solar energy is a more recent arrival, and rural residents may not be pleased to be in the vicinity of such developments. Conflicts involving a recently proposed solar energy farm in the town of Exeter, Rhode Island ideally demonstrate this phenomenon. In a recently issued ruling, the Rhode Island Superior Court affirmed the town’s rejection of a solar farm project proposed by the plaintiff.

According to the facts discussed in the appellate opinion, the plaintiff in the recently decided case is an energy development company that intended to build a solar energy project on 32 acres of land they own in the town of Exeter. Under local zoning and building ordinances, the plaintiff sought approval for the plan from the Town of Exeter Planning Board for the project. While negotiating compliance with the applicable regulations, several issues arose that the plaintiff was asked to address before seeking final approval for the project. These issues included the road access to the project, compliance with drainage and grading requirements, the environmental impact of the project, as well as the effects on neighboring property owners’ use and enjoyment of their own property.

The plaintiff attempted to address all of the issues presented by the Planning board and submitted their application. The Board found that the plaintiff had not sufficiently addressed all of the issues, and the board could not approve the project. The plaintiff appealed the ruling first to the zoning board of review, and ultimately to the State Superior Court, where it was rejected both times. The court ultimately ruled that the plaintiff failed to meet six requirements that were mandatory for the project to go forward. Notably, the plaintiff did not demonstrate that the proposal was environmentally safe, legally accessible, or consistent with the town’s comprehensive plan. As a result of these findings, the plaintiff will be unable to resume the development of their plan.