Articles Posted in Real Estate

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The State of Rhode Island and the municipality existing within the state have passed laws and regulations to support residential and commercial development that supports the political leaders’ vision for the state. To encourage the development of “traditional, New-England style” villages, municipalities have passed ordinances that incentivize developers to construct and maintain mixed-use developments that include residential housing, community infrastructure, as well as commercially zoned units to support the needs of the residents who live nearby. These developments are sometimes known as “compact village developments,” or CVDs. Existing property owners may not desire mixed-use development in their neighborhood, as 20th Century suburban development does not always exist in harmony with more modern, mixed-use proposals. The Rhode Island Supreme Court recently ruled against a property owner who had been trying to oppose the development of a CVD near his property.

According to the facts discussed in the appellate opinion, the plaintiff has been a property owner near an existing golf course since before the CVD proposal was submitted. A developer submitted plans for a CVD development that would include residential and commercial properties, as well as a renovation of the golf course clubhouse building. Under the applicable municipal ordinances, a CVD development must include “an appropriate proportion of residential to non-residential uses” to be approved. The plaintiff challenged the development plan. The plaintiff’s position was that the renovated clubhouse as well as the proposed commercial development created an inappropriate proportion of commercial to residential properties in the plan.

The plaintiff’s objection to the plan was rejected by the town, and he appealed the decision to the Rhode Island Supreme Court. In evaluating the plaintiff’s claims, the court determined that the improvements on the golf course clubhouse were separate and distinct from the additional new commercial development anticipated in the plans. The court found that the square footage of the clubhouse renovation should not be considered “commercial space” for purposes of the proportion analysis. Based on this determination, the court found no error in the town’s decision to deny the plaintiff’s objection to the project. Without a further appeal and legal action, the plaintiff will be unable to stop the development of the CVD he had challenged.

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Trespassing, or physically inhabiting a property without the consent of the owner, can be both a civil and criminal offense in Rhode Island. There are some interesting exceptions to this rule, one of which is the law of adverse possession. Adverse possession, as applied to real estate, is a legal doctrine that allows a trespasser who openly possesses property for an extended period to take legal title to the property. Although the law of adverse possession has its roots in Old Common Law, the Rhode Island Legislature has codified the right, and it remains the law in Rhode Island.

The most publicized and intriguing stories of adverse possession often include squatters. A squatter is a person who moves into an abandoned property and lives there as if it were their own. Under Rhode Island law, a person who openly and notoriously possesses property for a period of ten years may seek title to the property under the law of adverse possession. In evaluating an adverse possession claim of a residential dwelling, a court may consider whether the petitioner maintained and improved the property while residing there. Squatters who live in a property for 10 years, maintain and improve the property, and follow the proper procedures can gain legal ownership of the home.

Practically speaking, Rhode Island’s adverse possession law is more commonly used in resolving property line disputes between neighboring property owners. If a fence in between two pieces of property is not in the correct place, one of the neighbors is a victim of trespass. If the aggrieved neighbor does not pursue action to correct the trespass after ten years, the trespassing neighbor may be entitled to officially change the land ownership records and take legal title to the strip of their neighbor’s property on their side of the fence. New owners of a home may not even realize that the fences are in the wrong place, and allow the ten years to pass unintentionally.

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The programs established by the federal and state government in response to the economic and public health effects of the Covid-19 pandemic had significant effects on Rhode Island property owners and landlords. Policies like the residential eviction moratorium placed restrictions on the rights of property owners. Other policies, such as Rhode Island’s rental assistance program, helped both tenants and property owners to stay afloat economically during the pandemic.

As the pandemic appears to have stabilized to an endemic stage and some policymakers tire of active government responses to pandemic-related economic troubles, many of these programs have expired and will not be renewed. Rhode Island’s rental assistance program was closed out earlier in the summer. With the program’s termination, some renters and landlords were left in troublesome situations. A local news report was recently published explaining the effects of the program’s expiration on Rhode Island residents.

According to the facts discussed in the recently published article, the Rhode Island rental assistance program helped over 30,000 families to pay past-due rent and future obligations. On average, each family received about $6500 toward their rent. Although this program was designed to help renters, it was also very beneficial to landlords. Because there was an eviction moratorium in effect while the program was active, the only rent received by many landlords was thanks to the program.

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As development increases throughout Rhode Island, and the density of commercial and other development increases, conflicts and disputes can arise over access to businesses and parking. To ensure that existing buildings can maintain public access after new construction, municipalities, property owners and developers will issue easements to existing property owners, guaranteeing the use of the land for access and parking. Easements are supposed to be spelled out clearly and unambiguously in any contract that establishes an easement. In practice, this is not always the case. The Rhode Island Supreme Court recently addressed a conflict between parties over an easement that was not spelled out clearly and unambiguously.

The plaintiff in the recently decided case is a tenant and operator of a medical facility that borders a development owned by the defendant in North Smithfield, RI. Until last year, the plaintiff’s property was accessible from two sides, and the plaintiff believed that they owned easements guaranteeing the two accesses to their facility. The defendant, who had recently purchased the property from another owner, didn’t want the plaintiff’s patients using one the access from the defendant’s property, and they constructed a median to block the access.

The plaintiff sues the defendant in state court, attempting to enforce a 2005 easement that would guarantee the plaintiff access to their business from the defendant’s property. The defendant responded that the 2005 easement did not prevent them from constructing the median. The defendant maintained that the plaintiff’s property was still accessible through the other entrance and that they had the right to build the median. After reviewing the contracts and evaluating the case, the court ruled that the easement language contained in the initial contracts was too unclear to render judgment at this time. Because the language of the easement is ambiguous, and the intent of the pirates cannot be presently ascertained with existing evidence, the case will need to proceed to trial before either party gets the relief they desire.

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Public utilities such as water, power and sewer service are necessary for economic development and are commonly operated by municipal authorities. In some instances, a privately constructed and owned piece of utility infrastructure may be used by a municipality, although the owner of the property/equipment should be compensated for allowing the government to use the infrastructure. The Rhode Island Supreme Court recently permitted a full jury verdict of over $1 million to be awarded to the owner of a sewer system that the defendant town had been pumping sewage into without the plaintiff’s consent.

The plaintiff in the recently decided case is a company that constructed and operates a housing development in the town of Johnston, Rhode Island. The development, which was constructed in the 1970s included a sewage pipeline that would pump sewage from the residences up a hill and into the municipal sewer line. The plaintiff’s sewer line initially worked properly without issue, but as the development of the surrounding area progressed, the sewage pump repeatedly had problems. After investigating, the plaintiffs realized that the town of Johnston had been using their private sewer line and pump to move sewage from other developments. The plaintiff sued the town in state court, alleging that the town’s use of the plaintiff’s sewer lines was causing the maintenance issues, and resulted in over $1 million in damages.

After a 5-day jury trial, the plaintiff was awarded a judgment of over $1 million for the losses that they suffered as a result of the defendant’s unauthorized use of their sewage line. In a post-judgment motion, the trial court reduced the award to $100,000 based on a statutory limit to damages obtained against a government agency performing a public function. The plaintiff appealed the reduction to the Rhode Island Supreme Court, arguing that the operation of a municipal sewage line is generally a private, not a public function and that the $100,00 damage cap should not apply. The high court agreed with the plaintiff, finding that the design of a sewer system is a public function, but the operation of such a system is private. As a result of this ruling, the plaintiff will be entitled to the full jury award plus interest.

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Rhode Island laws concerning condominium developments are designed to protect the individual owners of multi-unit residential real estate developments while allowing the development association as a whole to implement policies that benefit the ownership unit. Because the ownership of condominium developments is usually shared among two or more separate unit owners, disputes and conflicts are common. The Rhode Island Supreme Court recently affirmed a lower court’s ruling that awarded injunctive relief and substantial attorneys fees to one member of a condominium association in a dispute.

The plaintiffs in the recently-decided case own one unit of a two-unit condominium structure. The plaintiffs purchased their unit from the original owners about ten years before the suit was initiated. The defendants purchased the other unit in the structure from the original owners. The controlling condominium agreement required the consent of both unit owners before making any significant structural or exterior modifications to the structure. After purchasing their unit, and without the consent of the plaintiffs, the defendants began modifying the exterior of the building. The Plaintiffs demanded that they cease the construction and filed a lawsuit in Rhode Island Court.

After a four-day trial, the superior court ruled in favor of the plaintiffs. The Court found that the defendants willfully ignored the condominium agreement, and acted uncooperatively throughout the process. Based on this determination, the trial court ordered the defendants to stop modifying the structure and to pay the plaintiffs over $200,000 in attorneys fees. The defendants appealed the ruling to the state Supreme Court, arguing that the lower decision was made in error.

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Rhode Island property owners know that some of the unfortunate side effects of property ownership include utility payments and property taxes. If a property owner fails to pay taxes or utilities for a significant period of time, the jurisdiction owed the monies may seek to perform a tax sale of the property. The proceeds of a sold property would then be used to pay the owed monies to any lienholders. The Rhode Island Supreme Court recently heard a case in which a man was challenging the tax sale of his property which had already occurred.

The plaintiff in the recently decided case is a man who previously owned property in Central Falls, Rhode Island. The plaintiff’s property was subject to a tax sale based upon debts owed to the Pawtucket Water Supply Board. The defendant, a real estate company, purchased the property at the tax sale. The defendant waited the requisite one year for the owner of the property to step forward before taking further action. In 2016, the defendant proceeded with an action to foreclose on the previous owner’s right of redemption and take full ownership of the property.

After the foreclosure process started, the plaintiff discovered what was happening and filed suit against the defendant, seeking to prevent the property transfer. The defendant responded that the plaintiff was sent notice of the foreclosure action, and also served by a constable. The plaintiff maintained that the defendant needed to include a “language assistance notice” with the foreclosure service documents for it to be valid and enforceable. The trial court rejected the plaintiff’s arguments, holding that the law concerning foreclosure actions does not require the inclusion of a language assistance notice with the service documents. Although the plaintiff appealed the ruling, it was affirmed by the State Supreme Court based on a clear application of the law. Although the court did not reverse the lower decision, it did encourage the state legislature to amend the relevant law to require such notice to be served for future cases.

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With the U.S. economy appearing increasingly likely to enter a recession in the coming months, many real estate developers may face obstacles in completing projects. If demand in the real estate market drops and economic activity contracts, many development projects that may have been profitable in the past will no longer be economically feasible. Some developers will hold off on their projects until the economy improves. A Rhode Island Superior Court recently ruled on a case filed by a developer attempting to resume development on a parcel of land that had stalled after the 2008 recession.

According to the facts discussed in the appellate opinion, the plaintiff is a developer who sought approval in 2007 to construct a mixed-use residential/commercial complex in the town of Tiverton. In 2008, the plaintiff gained the town’s approval for construction. After the 2008 real estate crash the project was no longer feasible, and the developer sat on the property for 14 years. In 2020, the plaintiff sought to resume the project and sought additional approvals from the town.

The town zoning board rejected the plaintiff’s 2020 application, pointing to the fact that new regulations concerning stormwater would require significant changes to the plaintiff’s plan, which must then go through more strenuous steps for approval. The plaintiff appealed the ruling to the administrative board of appeals for the town, which upheld the decision. The plaintiff then appealed the rulings to state court, arguing that the town was acting arbitrarily and capriciously by denying their request without justification. Specifically, the plaintiff argued that the town’s regulations were not in accordance with Rhode Island state law, which required towns to publish and apply consistent factors in making a zoning determination.

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Rhode Island has enjoyed a growing economy over the last several years. As cities and towns grow and development fill in the spaces of our small state, municipalities sometimes must compete with one another to encourage companies to choose their town for construction and development. Rhode Island law allows municipalities to offer tax exemptions to certain approved development projects in order to make their location more desirable. The procedures for issuing such tax exemptions can be the subject of conflict between developers and municipalities, as evidenced by a recent case decided by the Rhode Island Supreme Court.

According to the facts discussed in a recently published appellate opinion, the plaintiff owns a large parcel of property within the boundaries of the town of Lincoln, which is the defendant named in the case. The plaintiff obtained preliminary approval for a development plan on the property to build over 200 homes, some of which would be classified as “affordable housing.” To make the plaintiff’s plan financially feasible, the plaintiff would need a tax stabilization agreement from the town of Lincoln.

Based on a 2003 law that gave the town council the right to approve such a tax stabilization agreement for affordable housing projects, the plaintiff submitted a proposal from the council for a tax agreement. The town council refused to consider the plaintiff’s request, claiming that such a request would require approval from the Financial Town Meeting, which is a group of citizens that meets once per year to make economic decisions for the town. The plaintiff disputed the defendant’s claim that the tax agreement needed to be approved by an FTM, pointing to the 2003 law that expressly gave the town council the right to enter into such agreements.

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Rhode Island’s economy has strengthened over the last few decades, and the economic growth that accompanies such an economy requires various land uses to support economic development. Municipal zoning boards are tasked with determining if and how a certain construction or development project should be approved. Municipal zoning boards need to consider various interests when deciding whether to approve a request for construction or development, however, the boards’ discretion is limited by the ordinances that they are obliged to enforce. The Rhode Island Supreme Court recently affirmed a lower court’s decision that had rejected a town’s bid to stop the construction of a solar energy system within the municipal boundaries.

According to the facts discussed in the appellate opinion, the plaintiff, a solar power company, had leased a parcel of land in the town of Richmond for the purposes of constructing a solar energy system. In order to construct the system, the plaintiff needed to obtain a special use permit from Richmond’s zoning board. The town had passed an ordinance that explained the requirements for such a special use permit, which included the requirement that a “utility substation” was within 2 miles of the proposed project. The plaintiff presented evidence that a utility substation that met the requirements and was operated by Amtrak was within the two-mile requirement.

After several recesses and discussions, the town zoning board denied the plaintiff’s request for a special use permit, finding that the Amtrak substation was not a “utility substation” within the meaning of the ordinance. A controlling number of members of the zoning board ruled that the ordinance required a utility substation to be operated by the power company in order to qualify as a utility substation for purposes of the plaintiff’s requested construction project.

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