Articles Posted in Real Estate

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Several state and federal laws require that a home sold for habitation in Rhode Island meet specific standards for habitability and use. Additionally, home purchases are protected by common law holdings that forbid sellers from intentionally concealing or misrepresenting certain issues or defects which may exist in a home that is under contract. A state appellate court recently heard a case that was filed by the purchaser of a home against the former owners and alleged that defects in the home construction rendered the house uninhabitable and were concealed by the previous owners throughout the sale of the home.

The plaintiffs in the recently decided case purchased the defendant’s former home in March of 2013. The plaintiffs had one home inspection performed before the purchase, which found no major defects or issues relating to the home’s construction. After purchase, the plaintiffs discovered that the home, which was designed in the southern U.S., was not structurally adequate to support the snow load that the home could bear from a New England winter storm. The plaintiffs sought relief from the defendants, alleging both intentional and negligent misrepresentation of the fact that the home was defective, as well as a breach of contract, among other claims.

After a 15-day trial, the district court determined that the defendants were not liable for the plaintiffs’ claims. First, the court found that the defendants did not have any knowledge of the defects, and having lived in the house for over ten years before selling it without incident, could not have intentionally or negligently misrepresented any defects which neither they nor the building inspectors had discovered. The court further ruled that the defendants did not breach their contract and acted with good faith throughout the proceedings. On appeal, the state high court found that all of the district court’s conclusions were based on sound evidence and valid interpretations of the relevant law. As a result of the appellate decision, the plaintiffs will not be entitled to any relief for their discovery that the home they purchased is structurally deficient for the climate where it is located.

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Rhode Island property owners have serious interests in maintaining public road access to their property when larger tracts of land are divided after a sale or other conveyance. Occasionally, tracts of property that are not adjacent to any public road require easements on adjoining property in order to be accessible and maintain their value. A state appellate court recently published an opinion addressing a dispute over such an easement.

The plaintiff in the recently decided appeal is a woman who was awarded a piece of property from the defendant, her ex-husband, as part of a divorce settlement agreement in 2010. The property at issue, which includes a home, is adjacent to other property owned by the defendant, and does not border on any public road. As part of the divorce settlement, the plaintiff was awarded the property, as well as an easement to use the adjoining driveway which was on land owned by the defendant. Under the agreement, if and when the defendant constructed a separate driveway from the plaintiff’s property to a public road, the easement would expire and he would regain exclusive use of the original driveway.

According to the appellate opinion, the plaintiff’s home was also adjacent to an abandoned road that gave her access to a public road, although she had no ownership interest in the abandoned road. Prior to her filing suit, the defendant physically blocked the driveway through his property, forcing the plaintiff to use the abandoned road to access the home. The plaintiff filed suit, requesting an injunction to force the defendant to remove the obstruction and to allow her to use the shared driveway. The defendant answered the suit, arguing that the public road access through the abandoned road was sufficient under the settlement agreement to extinguish the plaintiff’s easement to use the shared driveway.

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Owners of real property located in New England coastal areas or near other protected natural resources are subject to local, state, and federal laws that may restrict or prohibit construction on the property in ways that the owner may not expect. The Appeals Court of Massachusetts recently published an opinion in a case filed by a property owner who sought compensation from the municipal agency that denied her construction permits to construct a home on a vacant lot.

The plaintiff in the recently decided case is a woman who inherited an unimproved lot in a residential subdivision from her parents and desired to build a home on the property. Her parents purchased the land in 1975, but the plaintiff did not take action to build on the property until 2006. Between the time of the purchase of the property and the plaintiff’s attempts to construct a home, various wetlands protection ordinances were enacted that required the plaintiff to obtain the approval of the defendant town conservation commission before building on the property. The defendant denied the plaintiff’s application for a permit to construct her desired home, and the lot was deemed unsuitable for any residential construction because of the wetlands protection laws.

The plaintiff filed a lawsuit in state court against the defendant, seeking compensation from the town under the legal theory that the decision restricting her from constructing a home on her property amounted to a regulatory taking, for which she was entitled to just compensation. After a trial was held, a jury awarded the plaintiff the fair market value of the property as if it were suitable for construction, and the defendant appealed.

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Disputes between neighbors over construction and land use within Rhode Island residential subdivisions often get out of hand, with homeowners going to great lengths to prevent their neighbors from using their property in the way they see fit. The Rhode Island Superior Court recently issued a ruling in a lawsuit that was filed over such a dispute, criticizing the pursuit of such claims when the requested relief would be futile and appeared to be sought in bad faith.

The plaintiffs and defendants in the recently decided case are each property owners in a multi-home subdivision in Portsmouth, Rhode Island. The development was created in 1960, and the lots were subject to several restrictive covenants that all property owners were required to abide by in order to protect the rights and interests of the other property owners. One such covenant required any property owner to seek the approval of a committee of owners before constructing a home on their lot. The defendants began construction of a home, but waited until after construction began to obtain the approval of the committee. The plaintiffs filed a claim against the defendants because the defendants failed to get the approval of the committee before starting the construction of their new home.

The claim was first heard in the Newport County Superior Court, where the court found that, although the defendants should have obtained approval before starting to build their home, the approval obtained by the committee after construction began was sufficient to meet the requirements of the restrictive covenant. The court noted with the approval already gained by the defendants, that granting the plaintiffs the relief requested (forcing the defendants to demolish their partially constructed home) would only lead to the defendants restarting construction of the same home in the same place, and was therefore not in accordance with the intention of the restrictive covenant or in the interests of justice.

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Rhode Island property owners may have several reasons for modifying the construction of a home or business building. Transforming a single-family residence into a multi-family dwelling can increase property values and potential uses for a piece of real estate. If a property owner is interested in modifying a structure or constructing additional units on their piece of real estate, they are required to obtain the approval of a municipal zoning board before starting construction. Zoning board decisions that approve or deny a proposed modification of an existing structure or lot may be appealed to a higher court, and might not stand after review.

In an opinion issued last year, the Rhode Island Superior Court reversed a decision by the Zoning Board Review of the City of Newport, which had allowed a property owner to demolish a small cottage on their land and replace it with another home. The recently decided case concerned a proposal by a Newport property owner to demolish a one-bedroom cottage that had been behind their house since the 1940s and replace it with a three-bedroom home that would be inhabited by the property owners’ son and his family. The property owner approached the zoning board and sought a special use permit for the construction, as was required under state law. After considering the objections of a neighboring property owner, the zoning board approved the permit to allow the demolition of the cottage and construction of the second home on the lot.

The neighbor appealed the board’s decision to the Rhode Island Superior Court, arguing that the proposed construction was forbidden under state law and that the zoning board abused their discretion by granting the special use permit. The high court heard arguments in the case from all parties, and determined that the municipal ordinance governing residential development prohibited the construction of two principal dwellings on one lot.

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Lessors of residential properties, including homes, apartments, and single rooms, are required by law to keep the properties to a certain standard of habitability for their tenants. In the event that a property is not habitable in accordance with the law, a tenant can pursue an action against the landlord to enforce repairs, reduce the rents, or invalidate the lease agreement. The Appeals Court of Massachusetts recently released an opinion affirming a lower court’s judgment in favor of a tenant who had counter-sued their landlord with claims that the property they rented was not habitable.

According to the recently published opinion, the defendants in the case leased an apartment from the plaintiff in December 2014. After part of the lease term had expired, the defendants complained to the plaintiff about certain maintenance issues that required repair. When the plaintiff failed to adequately address the defendants’ concerns, they withheld rents from the plaintiff and eventually moved out of the apartment. The plaintiff pursued an action to recover damages for the lease amount in Massachusetts Housing Court, and the defendants responded that the condition of the apartment was so poor that they were justified in withholding rents and ultimately breaking the lease. The defendants noted issues including a non-functioning bathtub spout, a leaky kitchen sink, cracks in the floor of the kitchen, inadequate access to the electrical panel, a broken deadbolt lock on the front door, bathroom ventilation issues, and a ceiling leak that resulted in water damage.

The Housing Court agreed with the defendants and ruled that the condition of the apartment was a violation of the implied covenant of habitability, which generally requires that a residential unit be fit for human occupation and will remain so for the duration of the tenancy. Based on that decision, the Housing Court reduced the rents the defendants owed, and also awarded them attorneys fees for defending the plaintiff’s claims. On appeal, the Court of Appeals of Massachusetts affirmed the housing court decision, noting that tenants have the right to habitable premises, and even if some of the issues existed at the time of lease inception and were not complained about by the tenants until later, the relief given by the housing court was appropriate.

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When a Rhode Island property owner fails to pay property taxes on their real estate, a tax sale may be triggered, where the property is sold at a public auction to the highest bidder. Whoever is the highest bidder may then take possession of the property after paying off the delinquent taxes. After a tax sale occurs, and if certain conditions are met, the delinquent property owner may still have a right of redemption and be able to reclaim their property by paying the past-due taxes.

The Rhode Island Supreme Court recently decided an appeal by a delinquent property owner who was attempting to reclaim his property after it was sold to another party in a tax sale. Under Rhode Island tax law, the purchaser of a property at a tax sale may commence an action to foreclose the right of redemption of the previous owner by filing a petition with the court and giving notice and an opportunity to redeem to the previous owner and other lienholders on the property at issue.

The plaintiff in the recently decided case purchased a property, formerly owned by the defendant, in a tax sale conducted by the city of North Providence. Under state law, the plaintiff filed a petition in state court to foreclose the previous owner’s right of redemption and gave notice to the defendant that they had 20 days from receipt of the notice to redeem the property or answer the petition, or the right of redemption would be forfeited permanently. The defendant did not answer the petition, nor did they pay the redemption amount within 20 days, however, they did later contact the plaintiff and discussed possibly redeeming the property after the 20 days had expired. The defendant eventually delivered a check to the plaintiff for the redemption amount; however, it was not rendered until two days after the agreed-upon deadline, and the plaintiff rejected the check.

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Landlords and tenants of residential, commercial, and industrial properties often share the financial and other obligations related to the property. These obligations include taxes, utilities, maintenance, insurance, and financial liability for injuries suffered on the property. Some obligations are generally accepted as the responsibility of the owner or the tenant. For example, the responsibilities of a Rhode Island landlord include paying property taxes on their properties. At the same time, residential tenants are responsible for purchasing renter’s insurance to protect their personal belongings in the home from damage or theft.

Other obligations like utilities or maintenance can be the responsibility of a tenant or owner, or shared, depending on the language of the lease agreement. Certain obligations may be required under statute to be taken by a property owner regardless of the language of a lease agreement. The Massachusetts Court of Appeals recently decided a case that addressed this very issue.

The central issue in the case was whether a residential landlord was permitted under state law to pass on maintenance responsibilities for utility systems to their tenants. The plaintiffs in the case lived in a mobile home community. They filed suit against the new owners of their residential community after the written policy concerning the maintenance of a heating oil tank was changed to place the burden of maintenance costs solely on the residents. The plaintiffs claimed the change amounted to a violation of a state law, which requires owners to make essential utilities available to each home site. The trial court agreed with the plaintiffs, and further ruled that the defendant was utilizing unfair practices under other state laws by placing the burden for replacement of a nonfunctioning fuel tank on the residents.

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Property law in Rhode Island and Massachusetts contains allowances for persons who are not in rightful possession of a piece of property to gain possession, or even title to the property if certain conditions are met. In Rhode Island, people squatting, or staying in an abandoned property without paying rent, utilities, or taxes may hold a certain right of possession to the property, and a Rhode Island eviction may be required to remove them from the property. Rental properties that are vacant and in need of renovations are among the most commonly targeted properties by squatters.

Rhode Island landlords and property owners should be careful to prevent squatters from taking residence in any unoccupied properties under their control. Physically securing any doors and windows to a property can prevent squatters from entry, and the display of no trespassing signs will discourage trespassers from taking residency in an abandoned or currently unused property. If squatters have taken up residence in an abandoned property, and the police have not found them to be committing a criminal trespass, then property owner should post a notice that the squatter(s) are in adverse possession of the property, and pursue a civil eviction of the squatters if they continue to refuse to leave

Under some circumstances, a squatter or other party in unlawful possession of a piece of property may be able to make a legal claim for title to the property. The claim, known as an adverse possession claim, is most commonly used to modify property boundaries between adjacent property owners. The Appeals Court of Massachusetts recently published a ruling in an adverse possession suit between neighbors.

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Landlords in Massachusetts, Rhode Island, and Connecticut must comply with the consumer protection laws of each state when charging security deposits or other refundable or non-refundable fees to incoming residents pursuant to a lease or rental agreement. Move-in fees charged for atypical types of living arrangements, such as inpatient hospitalizations or residency in an assisted living or retirement community may also fall under these consumer protection laws, however, the proper application of security deposit laws in such cases may be difficult to ascertain. A state appellate court recently published a ruling in a Massachusetts property law case concerning the application of a state security deposit limitation to a lease agreement at an assisted living residence in the state.

The plaintiff in the recently decided case is the estate of a woman who signed a residency agreement with an assisted living residence (ALR) operated by the defendant in 2013. In addition to the first and last month’s rent that she was required to pay under the lease agreement, the woman was charged a $2800 “community fee” by the defendant, which functioned similarly to a non-refundable security deposit within the residency agreement. After the resident passed away, her estate filed a lawsuit against the defendant, alleging that the $2800 community fee was a violation of Massachusetts state law, as it was not refunded to the resident’s estate after her tenancy expired, and was not used as the law requires of a security deposit.

The defendant answered the plaintiff’s complaint and moved the court to dismiss the claim, arguing that the community fee was not a security deposit at all, and that the statutes governing security deposits do not apply to ALRs, because they are not based on a traditional landlord-tenant relationship. The trial court granted the defendant’s motion and dismissed the complaint, resulting in the case being appealed to the state high court.

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