Articles Posted in Real Estate

Across the United States, municipalities, states, and even the federal government have the right to seize the property of private citizens under some circumstances. Although the Fourth Amendment to the U.S. Constitution protects citizens from unreasonable search and seizure of their property, government actors have carved out a range of “reasonable” seizures that are permitted under the law. Some of these seizures are defined under the term “eminent domain.”

Rhode Island has codified the standards for the state and municipalities to take real property from citizens under Rhode Island General Laws, 42-64.12. The laws under this chapter are designed to set the process for an eminent domain taking and ensure that persons who have property seized by the government for any purpose are compensated fairly for their loss.

One reason the government commonly uses eminent domain powers is to construct or modify roadways or other infrastructure or utility improvements. Because this use is widely understood to be in furtherance of the public good, the government need only compensate private citizens for the property’s fair market value. In addition to infrastructure uses, the government often seeks to seize private property for economic development purposes. Because economic development is not as widely agreed to be for the public good, the government needs to compensate private citizens whose property is seized for economic development more generously than for other uses. Specifically, the government must pay at least 150% of the property’s fair market value, as well as for relocation and moving expenses incurred by the person whose property was seized.

Although trespassing is against the law in Rhode Island, adverse possession is legal a loophole that allows individuals to secure an ownership interest in a piece of property after a certain amount of time has passed. To avoid this issue, landowners should familiarize themselves with the basics of adverse possession claims in Rhode Island so they can best protect their property right and their ownership over their land.

In general, adverse possession laws allow people who improve and live on otherwise neglected property or land to gain legal title after a certain period of time has elapsed. Although this period of time varies from state to state, Rhode Island’s temporal requirement is ten years. This means that an individual who is a continuous trespasser could claim legal title to otherwise neglected land after openly living on it for at least ten years.

Although the Rhode Island law appears simple, there are additional requirements that must be met by the individual who is “squatting” on the land. Courts in Rhode Island have held that “squatters” seeking to establish a claim of adverse possession must prove that their possession of the land has been “actual, open, notorious, hostile, continuous, exclusive, and under a claim of right.”

For homes located between two towns, homeowners will often struggle with water service rights. Sometimes, neither town will claim responsibility to provide the landowners with water and other natural resources. However, owners can bring what is called a “friendly lawsuit” against a city, in order to speed along the process of providing water to residents. In a recent Rhode Island Supreme Court case, the court upheld a superior court decision that required the defendants, the Portsmouth Water & Fire District, to provide the plaintiffs’ homes with water.

In the recently decided case, an eleven-lot subdivision falls between the border of two cities. A farm in this subdivision, the plaintiffs, brought a “friendly lawsuit” to speed up the time to have the defendants, the water supplier of one of the cities, provide their lot with water. However, shortly thereafter, the defendants refused to permit the plaintiffs to connect the lots on the property to their water main. After this refusal, the plaintiffs sought to require the defendants to provide water services to the subdivision lots.

During the trial in the superior court, the plaintiffs argued that the lots were entitled to water service from the defendants because the lots had a portion of its property in the city they were seeking the water from. Additionally, the homeowners on these lots paid taxes to this city—if they paid taxes, they believed they were entitled to water service. On the other hand, the defendants asserted they could not provide water to the subdivision lots because their interpretation of the city’s charter required only providing water to buildings fully located within their city.

Agreements and plans to develop real property into commercial or residential real estate are often reliant on several conditions being met before the agreement can be fully executed and construction begins. Developers must often obtain financing, zoning rights, and natural resources clearance before constructing a development. When unexpected or unforeseen obstacles to any of these conditions arise, a real estate deal can begin to fall through. The Rhode Island Supreme Court recently affirmed a lower court ruling that denied a developer’s request to force the owners of land to sell the land to the developers after conditions for the sale were not being met.

The plaintiff in the recently decided case is a real estate development company who entered into a purchase agreement with the defendants to buy several parcels of land with the intention of constructing a residential subdivision. As part of the purchase agreement, the plaintiff was supposed to secure financing for construction, as well as approval and permits from the town. The defendants agreed to be flexible with deadlines for the financing and approval, where appropriate. According to the facts discussed in the appellate opinion, the plaintiff faced unexpected obstacles in obtaining approval for the construction. Because neither the approval nor the financing had been obtained, the defendants stopped cooperating with the plaintiff in extending deadlines.

The plaintiff sued the defendants in state court, asking the court to force the plaintiff to follow through on the purchase contract. The defendants requested that the contract be voided because the plaintiff did not obtain financing in accordance with the terms of the purchase agreement. The court sided with the defendants, finding that the plaintiff cannot demand specific performance of a contract under Rhode Island state law if they are not ready, willing and able to perform the contract at that time. Because the plaintiff did not secure financing as agreed to in the purchase agreement, the defendants were not required to uphold their end of the contract.

After a party fails to manage their property accordingly, a real estate dispute may involve the court-ordered appointment of a temporary receiver who steps in to manage the property on that party’s behalf. The Rhode Island Supreme Court recently issued an opinion in a real estate case involving condominiums and a receivership. The court addressed whether plaintiffs lacked standing to appoint a temporary receiver after the defendant failed to make payments and make repairs to the units. The court ultimately vacated the lower court’s order, removing the appointment of a temporary receiver. This case highlights the complexities in bringing a receivership case due to the requirement of having legal standing.

According to the opinion, the defendants owned nine out of thirteen of the condominiums while the plaintiffs owned the remaining four units. Because the defendant owned a majority of the units, the defendant had a controlling voting share in the condominium association. The association failed to hold an annual meeting in 2017 and 2018 and collected no assessment fees until January 2020.

In April 2019, the roof of the condominium began to leak and repairs were not made in a timely fashion. The defendant argued that repairs were not made due to the insurance carrier and that a receiver should not be appointed, while the plaintiff argued that it was willful or negligent on part of the association and that the condominium should go into receivership. A receiver is appointed by the court when a person is deemed incapable of managing their affairs, allowing the receiver to manage the property on their behalf instead.

Municipalities, states, and even the federal government have the right to force the sale of a property to recover unpaid taxes or other fees from the property owner. Property owners who may face a tax sale should be given sufficient notice and the opportunity to pay back what is due before a sale takes place. Even after a Rhode Island tax sale occurs and a new owner purchases the property, the original owner has at least one year to redeem title to the property by paying the tax sale purchaser the amount of the purchase plus certain fees. After the one-year redemption period expires, the purchaser can foreclose the original owner’s rights and take full title to the property. The Rhode Island Supreme Court recently addressed a former owner’s challenge to a purchaser’s foreclosure of a property that had been purchased at a tax sale.

The defendants in the recently decided case owned a piece of property in East Providence, Rhode Island, and owed unpaid taxes and utility bills for the property. After attempting to collect the debts from the defendants, the city held a public tax auction of the property. The plaintiff purchased the property from the city at the tax sale. The defendant did not attempt to redeem the property during the one-year redemption period, and the plaintiff filed an action to foreclose on the defendant’s right of redemption after the redemption period expired. According to the case history discussed in the appellate opinion, the defendant failed to respond to the plaintiff’s petition within the 20-day period permitted to answer and ultimately filed an incomplete response without the help of an attorney.

The defendant failed to show up at the hearing scheduled for the plaintiff’s petition, and the petition was ultimately granted. The defendants then decided to retain an attorney and appeal the hearing justice’s decision to the state supreme court. On appeal, the defendant made several arguments that the foreclosure petition was not properly prepared and served on the defendant. The high court refused to hear the defendant’s arguments, however, because the issues brought up on appeal were not brought up in the defendant’s pro se answer or at the hearing. As a result of the appellate ruling, the plaintiff will retain full title to the property and the defendant will be unable to reclaim ownership.

Municipalities in Rhode Island use zoning laws to encourage specific types of buildings and businesses to prosper in certain areas of the municipality. Specifically, cities can use zoning districts to exclude certain uses and types of construction from areas of a city that have been reserved for a specific use as part of a larger growth plan approved by a municipal council. A dispute over whether a privately operated charter school could be built in a commercial zoning district made its way to the state Supreme Court and was recently decided in favor of the school.

The plaintiff in the recently decided case was the city of Woonsocket, which filed suit against a charter school that was run by a nonprofit organization. The school had previously gained approval from a city zoning official to build a location in the central business district of Woonsocket, and the plaintiffs did not want the school to exist at that location. The plaintiff sued in state court, alleging that the zoning approval should not have been granted by the official. The city argued that the district where the school would be located was for commercial development only and that nonprofit or private schools were specifically excluded from the zoning permissions for that location.

The defendant school, as well as the zoning official who approved the construction, argued that charter schools are in fact public schools under state law. Public schools are permitted in a commercial district as part of a municipal exception. The defendants demonstrated to the trial court that several areas of the state law classify charter schools as public schools and that a public school should and would be permitted at the proposed location. The plaintiffs’ claim that non-profit schools are not to be allowed in the district was rejected by the trial judge.

When larger parcels of land are subdivided into smaller parcels and lots for development, access easements and rights of way are important to preserve the marketability of the land. If certain lots do not have desirable access, they may not be suitable for construction. Buyers of private land should ensure that any easements for roadway access to their purchase are valid and enforceable. The Rhode Island Supreme Court recently entered a ruling that affirmed a lower court’s decision to enforce an easement and grant injunctive relief to a developer that was in a dispute with a neighboring landowner over the validity of an easement adjacent to their land.

The plaintiff in the recently decided case is a construction and development company who had purchased land from the defendant in 2016 for purposes of residential construction. As a condition of the purchase agreement, the plaintiff required municipal approval of the subdivision plan that divided the defendant’s parcels. A subdivision plan was drafted and approved by the town of West Warwick, and it included an easement attached to the plaintiff’s lot allowing for access along a private lane that was adjacent to the lot. The warranty deed conveying the lot from the defendant to the plaintiff included a reference to a different subdivision plan that was never recorded or approved by the town, and had no express reference to the easement.

After closing, the defendant chose to obstruct the plaintiff’s access to the private road and denied the existence of an easement. The defendant relied on the unrecorded subdivision plan that had been incorporated into the warranty deed and claimed the plaintiff’s lot did not have an easement to the private road. The defendant placed boulders along the lot’s access to the private lane. The plaintiff sued the defendant in district court, seeking enforcement of the easement pursuant to the recorded subdivision plan, as well as an injunction by the court forcing the defendant to remove the boulders from the property and allow the plaintiff access to the private road.

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.