by: Peter J. Gallagher (@pjsgallagher)
Believe it or not, this question comes up from time to time in my practice (exciting life, I know). In recent years I have prosecuted many foreclosure actions, but only commercial foreclosures. So the first question I usually ask a colleague who comes to me with a foreclosure question is: "Is it a commercial or residential property?" When the answer starts with something like, "Well, that is actually an interesting question . . . " then I can almost guess what is coming next. Usually it is some variation of: "It is a home, but they mortgaged it to get money to start a commercial enterprise, so I want to argue that its commercial property." Unfortunately, you usually can't make that argument (at least not successfully), and the Appellate Division's recent decision in City National Bank of New Jersey v. Hodge reminded us all of that fact again.
To begin with, the differences between commercial and residential foreclosures in New Jersey are significant. Most importantly, commercial foreclosures are not subject to the Fair Foreclosure Act, including the various notice requirements that are required for residential foreclosures under the Act. Simply put, New Jersey law provides greater protections for residential owners who are about to lose their homes than they do for commercial owners who are about to lose their place of business. This means that the burdens on lenders seeking to foreclose on a residential mortgage are more demanding, if not entirely onerous.
Continue reading “When, If Ever, Is A Residential Mortgage Not “Residential” For The Purpose of Foreclosure?”
by: Peter J. Gallagher (@pjsgallagher)
We just got another round of snow/rain/ice/freezing rain (hereinafter referred to as a “wintry mix”) this weekend. As I was out shoveling, my thoughts turned to the potential liability of property owners when someone slips on the wintry mix piled up on their property. OK, my thoughts did not really turn to this, but one of the questions that I do get asked somewhat frequently from friends and family is whether they can be liable if someone slips on their property under these circumstances. A recent decision from the Appellate Division, Zheng v. Santos, revisited the law on this subject. Although it is generally considered to be well-settled, the decision in Zheng reveals that there are a number of exceptions and nuances that make the law about as unsettled as our weather has been this winter.
In Zheng, plaintiff slipped and fell on the sidewalk outside of defendants’ three-family home in Jersey City. The issue before the court was whether the owners had a duty to remove snow and ice from the sidewalk. The trial court held that it did not, and the Appellate Division affirmed. In doing so, however, it provided a primer on the evolution of the law governing property owner liability for such injuries in New Jersey.
Continue reading “A Timely Decision On The Liability Of Property Owners For Slip-And-Fall Injuries Caused By Snow Or Ice”
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.
If you guessed the latter, then you are in agreement with the Appellate Division’s ruling in Mosteller v. Naiman, ___ N.J. Super. ___ (App. Div. 2010). The plaintiff sued the defendant after she removed six trees which she thought were on her property but really were on the plaintiff’s property. The plaintiff argued that he should be awarded the full replacement costs of the trees, which he estimated to be $436,750, while the defendant asserted the proper measure of damages was the difference between the estimated fair market value of the plaintiff’s property before the trees were removed and after they were removed. After the trial court agreed with the defendant’s position, the parties entered a provisional consent judgment in the amount of $20,000, which was apparently based at least in part on the defendant’s expert report that estimated that the reduction in the fair market value of the property as a result of the removal of the trees was between $0 and $20,000. The Appellate Division affirmed the trial court’s application of the diminution-of-market value approach.