by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)
Sometimes you read decisions and you don't understand how the court arrived at its conclusion based on the facts of the case. Then other times, the conclusion just makes sense. These are the decisions you read and think to yourself, "of course you can't do that." The Appellate Division's opinion in 5 Perry Street, LLC v. Southwind Properties, LLC, is one of these cases.
In Perry Street, defendants were a limited liability corporation and the sole member of that corporation. The corporate defendant owned property in Cape May that it operated as a bed and breakfast.Two "non-institutional lenders" held mortgages on the property. After they foreclosed and obtained a final judgment of foreclosure, a sheriff's sale was scheduled. The corporate defendant obtained four adjournments of the sheriff's sale and attempted to refinance the property, but was "unable to consummate a transaction" before the sheriff's sale.
Instead, the day before the sheriff's sale, the individual defendant filed for bankruptcy. She then transferred the underlying property from the corporate defendant to herself. The consideration for the transfer was $1 and the "Balance of outstanding mortgages $80,000.00." The $1 consideration was typed into the deed, but the individual defendant hand wrote the part about the outstanding mortgages. She claimed that her intent was to "assume personal liability for the mortgages," but the Appellate Division noted that the balance of the mortgages at the time was almost $250,000, not $80,000, and that other documents she signed reflected that the only consideration was $1. She "filed the deed the next day, an hour and a half before the Sheriff's sale."
Continue reading “Transfer Made On The Morning Of Sheriff’s Sale, For The Purpose Of Delaying The Sheriff’s Sale, Deemed Fraudulent”
by: Peter J. Gallagher
News about a housing recovery usually focuses on home sales, but Bloomberg ran a story this week, "U.S. Can Rent Its Way To A Housing Recovery" (h/t/ Land Use Prof Blog) that suggests that this focus may be off. The author suggests that the Obama Administration should allow a tax write-off for investors who buy empty properties and rent them out. The author claims this would help with two of the biggest problems with the housing market – the large amount of owner-occupied houses on the markets, which pushes prices down, and the millions of homes with negative equity: “Dealing with excess inventory by shifting vacant properties into the rental market would help to stabilize prices and thereby mitigate, to some degree, the negative-equity issue — although additional action would also be warranted to attack such ‘underwater’ situations." The ideas expressed in the article are obviously not without controversy, however, as even a cursory glance at the comments posted about the article make clear.
by: Peter J. Gallagher
The New York Times is reporting that the government is soliciting ideas for turning its glut of vacant, foreclosed houses into rental units that could be managed by private parties or sold in bulk ("U.S. Seeks Ideas On Renting Out Foreclosed Property"). The goal of the program would be to "stabilize neighborhoods where large supplies of empty, foreclosed properties have hurt property values" and "clear the nation’s balance sheet of real estate holdings that, because they have been difficult to sell individually, have hung over the housing market and stunted sales of existing homes and new construction." The request for ideas comes from the Federal Housing Finance Agency, the Department of Housing and Urban Development, and the Treasury Department, and you can click here to submit your ideas.
As the article notes, the percentage of homes owned by the government that are currently in foreclosure is somewhat staggering:
Of the 248,000 homes owned by Fannie Mae, Freddie Mac and the F.H.A. at the end of June, 70,000 were listed for sale, said Corinne Russell, a housing finance agency spokeswoman. The remainder were not yet on the market or the agencies had already received an offer from a prospective buyer.
But it is possible that hundreds of thousands of more homes that are now in the foreclosure process could come into the possession of the federal government in the next few years, housing experts say.
The government is now looking for a few good men ideas for how to deal with this crisis. Among those already proposed are "rent-to-own programs, in which previous homeowners or current renters could lease properties as a path to ownership, and ways in which the properties can be used to support affordable housing."
If you have any thoughts, be sure to let us know when you let the government know.
by: Peter J. Gallagher
The most recent Case-Shiller index suggests that home prices ticked up in May ("U.S. Housing Prices Rise Slightly, But Remain Weak"). While this might sound like good news, experts were hardly celebrating. Most attributed the rise in the composite index to "seasonal factors" (i.e., demand is typically strongest in the Spring) and pointed to other negative signs – "contract cancellations, tightened lending standards and sales of new homes in June" — as better examples of the overall health of the market.
Against this grim news comes surpisingly good news from the usually bad news rich housing market of Florida. In "Affluent Buyers Reviving Market For Miami Homes," the New York Times notes that sales in Miami, particularly on higher end properties, are up more than 16%, with more than two-thirds of those sales being all cash deals. While this revival is obviously limited to the wealthy, it is at the very least a small ray of hope in an otherwise downtrodden real estate market.
by: Lawrence A. Calli
Owners of residential properties in New Jersey are no longer limiting themselves, in concept or use, to the idea that a person's home is a mere bastion of solitude and rest. Rather, many homeowners are expanding their use of residential lots. To be clear, we are not talking about simply adding a home office or mother/daughter suite. No, the newest trend appears to be raising livestock, and it’s not merely a trend in the southern and western counties of the State. The trend towards municipal ordinances permitting livestock on residential properties has already spread to urban areas (including Jersey City), and is regularly considered by mayors and councils throughout the State.
In a recent article, the Hopewell Valley News reported that the Hopewell Borough Council has been asked to consider an amendment to its land use ordinance that would allow residents to raise chickens in their backyards ("Hopewell: Backyard Chickens Are Council Topic"). The article notes that amendments in other parts of the State permit residents to keep as many as seven chickens within 25 feet of a neighbor’s property as long as the neighbor approves (larger flocks have to be kept 40 feet from the nearest neighbor).
Hopewell Township recently adopted an ordinance that permits residents to keep up to six chickens on their property. The ordinance gained some notoriety because it limits rooster visits to only 10 days per year, and requires that the roosters be disease-free before visiting with the hens. However, a spokesperson for Hopewell Township indicated that the amendment that Hopewell Borough adopts would not "in the slightest, possible way” mimic what occurred in Hopewell Township. In fact, "a majority of communities forbid roosters because some find the crowing noise they make a nuisance, especially if it occurs in the early morning hours."