Articles Posted in Real Estate

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States and municipalities have the authority to use and take title to parcels of private property in Rhode Island using eminent domain powers. For a private property taking to be valid, the state or municipality must follow certain procedures, most importantly offering just compensation to the original property owner. The Rhode Island Supreme Court recently heard a case of the state being sued by a property owner, who alleged that the state constructed a bicycle path across their property without following the proper procedures or offering fair compensation for the land.

The plaintiff from the recently decided case is the owner of a coastal parcel of property in Providence. In 2015, the state of Rhode Island started proceedings to purchase a strip of the plaintiff’s land to construct a bike pathway. The city erroneously believed that the strip of land was owned by the city of Providence, and pursued condemnation proceedings against the city to gain title to the property.

Once construction started on the bike pathway, the plaintiff attempted to assert his property rights over the strip of land, contacting the state and demanding that construction cease. Eventually, the plaintiff filed an action in state court to assert his property rights over the strip of property and seek damages for the taking. According to the analysis from the appellate opinion, the trial court found that the strip of land did not belong to the city of Providence, and that the state’s 2015 condemnation of the property was invalid. As a result of this ruling, the plaintiff will be compensated for the value of the land that was taken by the state, as well as the loss of value that he may suffer from adjacent properties.

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Rhode Island property owners are generally allowed to seek damages through state courts from contractors who fail to uphold the terms of a contract for repairs or improvements. Certain claims may not be best suited to be heard by a superior court, and the law has provisions to allow for simplified proceedings in some cases. For disputes concerning $5000 or less, parties can pursue a small claims proceeding in the district court. Small claims cases are not as complicated as superior court cases, and the simplified rules of procedure allow parties to represent themselves more effectively in such proceedings.

Claims for amounts over $5000 are generally heard in the superior court; however, the parties may agree to seek binding arbitration in the event of a dispute. Arbitration is a semi-judicial and binding proceeding where a private arbiter is chosen to decide contractual disputes instead of a court. Arbitration proceedings are simplified and often result in fewer legal expenses for the parties involved. If both parties agree in writing upon entering into a contract that disputes will be resolved through arbitration, then they must abide by the agreement and cannot file a lawsuit in the superior court over a dispute. A Rhode Island superior court recently addressed a claim by a landlord against a contractor for breach of contract where an arbitration agreement had been previously made.

The plaintiff in the recently decided case is a property owner and landlord who entered into a contract with the defendant to complete repairs and improvements on a home. The parties entered into an arbitration agreement upon signing the initial contract. After the defendant allegedly failed to perform the contract, the plaintiff sought administrative relief through the Contractors’ Registration and Licensing Board, a state agency. As part of the CRLB proceedings, the parties agreed in writing to waive the arbitration agreement and allow the CRLB to handle the dispute. Once the arbitration agreement was waived, the plaintiff filed suit against the defendant in the Superior Court for breach of contract.

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In this case, a builder wanted to build a house on a vacant piece of land in Warwick, Rhode Island. The builder wanted to build a single-family home on the lot. The lot was next to a pond and next to other lots with homes. Under a Warwick Zoning Ordinance, the specific residential lot was required to be at least 7,000 square feet in size in order to build on the property. The lot in question was less than 4,000 square feet.

The builder submitted an application to the Zoning Board for a dimensional variance. Zoning board hearings were held in which members of the public expressed concern over the impact the proposed home would have on the neighboring property values as well as the size of the house. The Zoning Board considered the use of the property and the reason for the variance and voted unanimously to grant the application for a dimensional variance. The owners of property neighboring the vacant lot filed an appeal, arguing that there was no basis for granting the dimensional variance and that the Zoning Board relied on outdated standards of review for a dimensional variance.

Variances Under Rhode Island Law

Variances in Rhode Island property cases are requested when a property’s proposed use does not meet the requirements of a zoning ordinance. A variance allows a landowner to use the property in a way that would not be permitted under a zoning ordinance. Municipalities have different procedures for seeking a variance, but generally include submitting a written application to the local Zoning Board. Individuals affected by a Zoning Board’s approval or denial of a variance can generally appeal the decision of the Zoning Board, as in the case above.

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Rhode Island property owners are required to pay taxes and utility bills to the state and municipality where the property is located. Failure to keep up to date on due tax and utility obligations can ultimately result in a property owner losing possession and ownership of their property. In the event that the state or a municipality seeks to collect tax or utility obligations from an owing party, the government may hold a tax sale of the property.

A tax sale is an auction where the purchaser of the property pays a certain amount for the property, and the amount owed by the original owner is taken from the purchase price to fulfill the obligations. After a tax sale, there are specific procedures and notice provisions in place to allow the original owner to redeem the right to the property by paying the past due amount and other fees. If an original owner does not utilize their right to redeem the property within the prescribed time, they can permanently lose all interest in the property. The Rhode Island Supreme Court recently heard an appeal by a property owner who challenged the foreclosure on his right to redemption of a piece of property that he had owned and was sold to an investment group at a tax sale.

According to the facts discussed in the appellate opinion, the petitioner in the recently decided case was an investment group who purchased the property in East Providence that had previously belonged to the respondent and was sold at a tax sale. The tax sale was held because the respondent had not paid water bills on the property for three years, and failed to respond to the municipality’s communications concerning his nonpayment. Under the statutory framework governing tax sales in Rhode Island, a person whose property is sold at a tax sale may redeem their right to the property within a certain period of time after the tax sale. Once this time period has passed, the purchaser can file an action in state court to foreclose on the former owner’s right of redemption, permanently taking ownership of the property to do with it as they see fit.

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The State of Rhode Island and its municipalities routinely perform widespread property valuations on private property in the state to determine the property tax burdens of property owners. In the tax years after a valuation is completed, property owners are required to pay taxes based on the updated amounts until another valuation is complete. Tax valuations are not necessarily completed annually, with some jurisdictions performing a valuation as rarely as every five years. Valuations are mandated to be fair and nondiscriminatory. The Rhode Island Supreme Court recently reversed a trial court ruling that found the City of Providence treated a group of condominium owners unfairly by arbitrarily performing a tax valuation of their property.

The plaintiffs in the recently decided case were a group of condominium owners who filed suit against the City of Providence after they were sent increased tax bills for 2014 despite no citywide tax valuation having been performed in 2013. The plaintiffs argued that they were selected to pay increased taxes for 2014 while other property owners in the city were paying lower taxes based on a 2012 valuation. The city responded that the condominium complex had been subject to a tax stabilization agreement (TSA) from 2004 to 2014, and that the expiration of that agreement justified a reevaluation of the property in 2013 to determine the owners’ 2014 tax burden.

At trial, the judge sided with the property owners, finding that no other previously existing properties were given a tax valuation in 2013 and that the city was arbitrary, selective, and discriminatory when choosing to perform a tax valuation on the condominium project. The city appealed the ruling to the Rhode Island Supreme Court. On appeal, the high court found that the city was justified in performing a tax valuation of the plaintiffs’ property in 2013. The judge noted that the tax stabilization agreement that determined the plaintiffs’ tax burdens from 2004 to 2013 was very favorable to the plaintiffs. With the expiration of the agreement in 2013, the city needed to determine the actual taxable value of the property for 2014. The court ruled that under state law the city was allowed, and even required, to perform the 2013 valuation. As a result of the Supreme Court ruling, the plaintiffs will be required to pay the amount that had originally been billed for 2014.

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Until 1978, many homes and businesses were constructed or renovated with paint containing lead. Lead is an element that has been found to cause many health problems, especially in children. In children, lead can impair brain development, as well as renal function and the nervous system. Considering these risks, the U.S. federal government banned the use of lead paint in 1978 for new construction projects. Both states and the federal government have been making efforts over the past four decades to eliminate lead-based paint from homes and businesses, using both positive incentives and negative consequences to encourage property owners to remove lead-based paint.

A recently published news report discusses three lawsuits filed by the State of Rhode Island against property owners who have failed to remove lead paint from their properties after the legal notice was given for them to abate the dangerous product from their properties. The new enforcement strategy of filing suit against non-compliant property owners represents a proactive stance the state is taking to make lead poisoning in children a problem of the past. According to the news report, the property owners who are being sued purchased their properties after lead violations were issued to prior owners. After purchasing the properties, the new owners were issued additional notices to remove the lead paint, and the three defendants failed to do so. If the three lawsuits are successful, the property owners will be required to pay to have the lead paint removed, and other financial penalties may also be imposed.

Anyone seeking to purchase property in Rhode Island with buildings constructed before 1978 should be concerned about the possible presence of lead paint in the buildings. Although home inspections do not always look for lead paint, a prospective buyer is able to specifically request an inspection for lead paint in order to determine if a future abatement will be necessary. Lead paint removal can be expensive, costing an average of $10,000 for a single-family home. By determining whether any lead paint will need to be removed before a home or business is compliant, prospective buyers can adjust their purchase offer accordingly.

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It is not uncommon for private businesses to allow land adjacent to their property to be used by customers for parking or other purposes. Often, months or years can pass before the rightful owner of a piece of property realizes that an adjacent property owner is using it for their own purpose. A recently published local news article discusses a dispute between the city of Newport and a local restaurant over a strip of land owned by the city that the restaurant is using as part of their parking lot.

According to the news report, the city of Newport has demanded that a local restaurant stop using a 2400 square-foot section of land that lies between the reservoir and a city-owned artificial pond that is used as part of the city’s water system. The city claims that the adjacent land belongs to it and that the land needs to be used to improve and repair the shoreline of the pond to address safety and efficacy issues. The restaurant claims that the piece of land has been used by the owners of the restaurant’s land for over 20 years for parking and that the restaurant is entitled to continue such use. According to the survey information, the land originally belonged to the city.

Property owners who have continuously possessed and used property that is owned by a neighbor or other party for their own purposes may be entitled to claim ownership of the land under a legal theory known as adverse possession. Adverse possession allows a property owner to assert the right of title over a piece of land that has been used openly and obviously for an extended period of time, without the rightful owner objecting or taking any other legal action to stop the use of their land.

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As property values increase in coastal Rhode Island and residents of other states purchase beachside homes as retirement or vacation properties, the long-standing conflicts over public beach access in the state will continue to worsen. Wealthy landowners and developers of luxury properties have a financial incentive to restrict public access to beaches in order to advertise their properties as more exclusive. Although the vast majority of beaches and land immediately adjacent to the coastline are public property, without public access from the road, residents and visitors have practically no way to use the public beaches. A recently published news report discusses a legal battle over beach access in Westerly, Rhode Island, specifically noting how the discovery of a historical survey map could turn the tide of the battle in favor of public beach access.

According to the report, the beach known as Quonochontaug, is one of the most beautiful beaches in the state. As beautiful as the beach is, there is currently no public access to the shore. Developers have purchased all of the land adjacent to the beach and blocked any public paths leading to the shore, creating what amounts to a private beach for their residents and customers. The article notes that one 50-foot wide trail that was previously used as public access has been blocked with a fence and is not currently usable. An attorney fighting for public access to the beach has been on a mission to prove that the fenced-off trail does not belong to the adjacent property owners and is in fact a public pathway that should remain passable to allow anyone to access the beautiful beach.

In an effort to make his case, the attorney combed through public historical documents to support his case. In the basement document repository of the Westerly town hall, the attorney found a document from 1939 known as a plat map that might prove his case. Plat maps are scale drawings of land that are approved and filed with the state and municipality to show the ownership and characteristics of the land as it is being developed. In the 1939 plat map that was prepared before the property surrounding Quonochontaug was developed, the 50-foot wide section of land was designated as a public road. According to the attorney quoted in the article, that designation has not been changed in the decades since the map was made, and the path remains public. If the attorney’s arguments are accepted by the state Coastal Resources Management Council, the fencing will need to be removed, and public access to the beach can be restored.

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The laws of trespass are generally understood to apply to people who enter or remain on a piece of personal property without the consent of the owner or the legal right to do so. From a legal standpoint, the theory of trespass is much broader. Trespass to land is generally understood to entail a wrongful interference with one’s possessory rights in real property and can extend both underground and into airspace. In the event that a neighboring property owner modifies their own property in a manner that disrupts their neighbor from possessing or using their property, a trespass may have occurred. A Rhode Island Superior Court recently found that the state of Rhode Island is liable for trespass based on a stormwater drainage pit maintained by the state that repeatedly overflowed into a cemetery.

The plaintiff in the recently decided case is a cemetery that was founded in 1902 in North Kingstown, Rhode Island. Adjacent to the cemetery is a roadway that is maintained by the defendant, the State of Rhode Island. Until 1984, the state road had problems with flooding during times of heavy rain. In 1984, the plaintiff gave permission for the defendant to construct a drainage ditch and seepage pit on the cemetery property to alleviate the roadway flooding. Pursuant to the agreement, the defendant compensated the plaintiff and agreed to make reasonable attempts to reconstruct the road in a way that would alleviate the flooding and return the plaintiff’s property. The defiant never reconstructed the road, and the drainage system remains on the plaintiff’s property. According to the facts discussed in the judicial ruling, during times of heavy rains, the seepage pit overfills with water, which flows onto other parts of the plaintiff’s property.

The plaintiff filed suit against the defendant in state court in 2015, challenging the easement for the drainage ditch and alleging that the defendant has committed an actionable trespass against the plaintiff by allowing the seepage pit to overflow and flood the plaintiff’s property. The court rejected the plaintiff’s claims that the easement was invalid. The court did find that because the pit overflows and floods into areas of the plaintiff’s property not included in the easement, that a trespass had occurred. The court ruled in favor of the plaintiff on that issue, reserving the question of damages for a later date.

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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.

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