Real Estate Law Title

The Interstate Land Sales Full Disclosure Act (”ILSA”) is a federal law which was passed in the late 1960s to protect buyers of out-of-state land. Those were the days when parcels of vacant land might be advertised to far-flung speculators as promising wonderful development opportunities. Only once the land was purchased and the purchaser traveled to take a look at the parcel for the first time, it would turn out to be a worthless, isolated patch of desert or swamp with little or no potential to access the infrastructure or resources needed to sustain a viable development project.

In the years since ILSA was passed, the law has been held to apply to condominium developments. And as real estate market watchers know, pre-construction condo investments in places like South Florida may appear to present many of the same problems that vacant land sales once did. In particular, pre-construction condos are advertised as glamorous out-of-state investment opportunities — a chance to make money while literally owning a cutting-edge piece of paradise. But the glamour wears off quickly once the market takes a downward turn and the buyer is unable to resell the property, whereupon he or she scrutinizes the development with a critical eye. At this point, the buyer detects ways in which the building (which may not yet be fully constructed) deviates from what he or she believes was promised before signing the purchase agreement, and the buyer begins to feel cheated.

One of the significant requirements of ILSA is that the developer register the development with the U.S. Department of Housing and Urban Development (”HUD”) and furnish a thick “Property Report” to the buyer before he or she signs the purchase agreement. Not surprisingly, developers don’t want to comply with this somewhat onerous requirement if they don’t absolutely have to. And in fact, there are a number of exemptions which developers can take advantage in order to avoid the registration and Property Report requirement.

One particularly important exemption, which is widely misunderstood, is the so-called “two-year” exemption. Generally speaking, a developer does not need to register with HUD and provide a Property Report if the developer provides a contractual commitment to build the development within two years after the date the buyer signs the purchase agreement. However, the “two year” exemption is not as straightforward as it may seem, because while developers may seek to “qualify” any two year commitment by limiting the buyer’s remedies in the event that the two-year deadline is missed, Florida court are rather strict in their interpretation of the exemption such that the developer may actually lose the exemption if it qualifies the two-year deadline in such a manner.

Of special importance on this last point is 15 U.S.C. section 1703(c), a section of ILSA which provides that in the event a Property Report is required but the buyer is not provided one prior to signing the purchase agreement, the buyer has the option of revoking the contract. Given the current real estate market, it is unsurprising that there a number of cases currently on the docket in Florida state and federal courts allege that buyers (who are seeking to get out of their condo contracts) were not provided a Property Report when they should have been. Time will tell whether the courts agree with these buyers and find that the failure to provide a Property Report is an adequate basis to cancel their contracts. (See here for my previous article on issues relating to the buyer’s right to rescission under Florida state law, which is distinct from the federal law remedy under ILSA.).

By Jared H. Beck, Esq.

RERA (Real Estate Regulatory Authority) has warned the investors of property in Dubai to keep caution on their investments with developers who do not comply with the RERA guidelines. RERA is a central authority in Dubai responsible for real estate and property legalization. In strict words the authority warned the property investors to be careful on the following guidelines:

1. The property Developer must have a registration with RERA and should have the registration number.

2. The payments made to the developer’s company should be to the trust account where the financial institution must be a RERA approved institution. Also the property broker must carry an ID card which would be a stamp of his/her registration with RERA.

This tightening of laws in Dubai is a boom to the property industry in Dubai promoting further investments due to an increased safety. The establishment of the new escrow law 8 has helped promote the investor interest in the region. As per this law every new development in Dubai must have a compulsory escrow account. Presently as per the market all the new establishments would have to follow this law (i.e. those establishments which have been launched after Law 8 was issued in the market). However some sources in the industry say that by the end of the year, the new law 8 would apply to all the existing property developments in the Dubai land.

RERA and the new law 8 have provided a much needed relief to the buyers of property in Dubai who in the past have been frustrated by the delays or in some cases a loss of investment. The best response to this development in the Middle East would reflect in the new cityscape project trade show in Dubai. Moreover, since the launch of the new law 8 in the Dubai property market, there has been a considerable slow down in the launch of new projects where developers are finding it hard to meet the guidelines. This has certainly pointed out that the new law has made a stir in the market prompting safer investments.

This article will be the start of an ongoing series that will examine various general aspects of the legal environment of foreclosure. Homeowners far too often avoid going to the initial court hearing to discuss the mortgage default, and the bank has a very easy time of proceeding from missed payments to sheriff sale to eviction. There are a number of methods and ideas that can be used during the court procedures, though, to give these families more time, more options, or a second chance to stop foreclosure and get their loans back on track. But without a broad understanding of what the court process is designed to accomplish, these opportunities may be lost before homeowners know they have them.

Every legal claim made by the lender has numerous elements that need to be proven and backed up with facts. Obviously, in a foreclosure lawsuit, the main claim will be that a contract was breached, namely the mortgage loan secured by the house. The lender will attempt to prove that the homeowners did not pay as agreed and ask the court to grant them a judgment, which will allow them to sell the house at a county sheriff sale, in order to pay off this judgment. In most foreclosure cases, this seems like it would be a pretty open and shut case, especially if the family knows it has not made a payment in several months. This may be one reason that they do not often make it to the foreclosure court hearing — they know they have little defense and believe it will do no good to argue that a financial hardship has caused them to fall behind.

It is important, though, that homeowners understand how these processes work and what the lender has to show in order to have a legitimate case. The first element that the foreclosing bank has to prove is that there was a legally binding contract between the lender and the homeowners. After a loan has been sold numerous times, it may seem quite confusing to the average homeowner of who actually owns the mortgage. In fact, with the amount of technical, incomprehensible adjustable rate mortgages and interest-only loans and subprime mortgages that were packaged and sold off to hedge funds, financial institutions, and investors, there may be some very tough questions that the lender would have to answer if challenged on this element. A court in Ohio recently dismissed fourteen foreclosure cases because the lender could not prove they owned the loans, so this is not as easy as it would seem.

The second aspect that mortgage companies have to prove when suing for foreclosure is that the lender performed as agreed under the contract. Wading through dozens of pages of mortgage contracts is not the most inviting exercise for the average homeowner, but understanding exactly what the lender’s obligations are during the term of the mortgage may help them prepare a better answer to the foreclosure lawsuit. In particular, the lender is usually responsible for collecting and applying payments in a reasonable manner, a practice some lenders have been caught not following.

In fact, we receive stories from homeowners every day that state their lender did not apply a payment, applied payments incorrectly, or lost payments completely, which led them to initiating a foreclosure unjustifiably. There are also literally hundreds of stories from homeowners who have had their loans serviced in a fraudulent manner. Simply assuming the bank has performed its duty under the contract relieves them of the burden of proof. Homeowners can ask for real proof that the bank actually did fulfill its own obligations under the terms of the agreement, a request that the bank may have trouble complying with.

The lender must also show that the homeowners have breached the contract, thereby satisfying the proof required of the third element. This is usually easier to show, because they can bring in payment records with clear gaps in payments. However, homeowners who have had payments misapplied or cashed but not applied at all can state these defenses, and the lender must prove that they did not actually receive payment. If the foreclosure victims can show they have not breached the contract, there is usually no case against them. In fact, they may have claims against the lender who was negligent about collecting payments and began a potentially fraudulent foreclosure lawsuit against the clients.

But even in cases where the payments were simply never sent in due to a financial hardship, homeowners can often utilize other resources of the court to resolve the problem. Often, judges would rather keep the case from going to trial if a settlement can be reached. This may involve the two parties coming up with a mutually agreed-upon repayment plan, temporary loan modification, or other similar program which gives the homeowners another chance to get back on track with the mortgage and repair their credit.

The final element of a foreclosure case that the lender must prove is that they have suffered actual damages due to the homeowners’ breach of the contract. Obviously, they are not collecting interest or principal payments, which does hurt the lending business and decreases their ongoing revenue. Also, they have to expend more resources in attempting to collect the missed payments, reviewing loan documents, examining the benefits of foreclosing on the property, paying costs of foreclosure, and so on. It is clear that banks suffer some damages of the loan during a foreclosure, even if it is only a very small part of the company’s overall business.

The burden of proof falls upon the bank to prove each and every single one of these elements of their case against the homeowners. When foreclosure victims avoid these hearings, though, and judge themselves as guilty without requiring the lender to show proof, they make the foreclosure process much easier for the lenders. Hopefully, by being aware of the general aspects of a foreclosure (and any other breach of contract) case, the homeowners will be able to mount a more substantial defense and show these mortgage companies that they will not simply be pushed around, intimidated, and forced out of the home due to irrational fears and anxieties over the situation.

DISCLAIMER: None of the general information or advice offered in this article should be taken as legal advice, which can only be dispensed by a state-licensed attorney, who has completed an approved course of study at an accredited law school and has passed the mandated examination to become a state-approved attorney. Homeowners in foreclosure who desire representation should seek out a licensed attorney who is able to work in their state. This article is designed to provide general information only and act as a starting point to other independent research. Laws vary by state and court rules vary by county and specific court, which a licensed attorney can explain far better than any single article on the subject.

Estate planning is a serious responsibility. It is a way to make sure that all you have worked for your whole life goes to those you love. It is a way to make sure everyone is provided for. You are never too young to think about drawing up a will. In Louisiana, the estate planning laws and laws of inheritance are somewhat different than those anywhere else.

What Happens If You Don’t Leave A Will?

If you don’t leave a will, what do you think will happen to your wealth and possessions? Most of us imagine that it will automatically be transferred to our husbands or wives. In Louisiana, that is not the case.

According to Louisiana estate planning law, if there is no will everything goes to the deceased’s parents. They own the property and have full usage rights. If the parents are no longer living, everything goes to the deceased’s siblings.

Without a will, your accumulated wealth and possessions do not go to your spouse, except for purchases made together during your married life.

Any wealth that the individual has acquired separately of their spouse will be transferred to parents or siblings, and this includes business earnings. Separate property is acquired prior to a marriage; acquired by inheritance or donated to one spouse individually; or acquired by one spouse with separate funds or with separate and community funds where the community funds are very small in comparison to the separate funds.

If there are kids, the kids will get ownership of the estate, but they will not have usage rights. This means that, although they get a share of the inheritance, they have no rights over it being sold or divided among others. Even in the case where the kids inherit the wealth, the spouse still gets nothing.

It is always important to make a will, but this is why it is especially important in the state of Louisiana.

Alternatives To Making A Will

Some people are reluctant to make a will because it becomes a matter of public record after you die. This means that anyone can see what you owned, how much, and who it was transferred to. For privacy’s sake, many people look for other options.

There are lots of options to making a will, including life insurance policies, trust funds, “Transfer On Death” and “Payable On Death” plans, IRA’s and joint tenancy or common tenancy plans, where an individual can make all of their earnings common property of themselves and their spouse and/or kids.

It is easy enough to make a will. Anyone 18 years of age can do it. But, these alternatives require estate planning legal help.

Finding An Estate Planning Specialist

It is very important to find an estate planning lawyer who either resides in Louisiana or has experience dealing with Louisiana estate planning law. Louisiana operates differently than other states in this regard.

The most important thing is to make sure that your family is provided for after you die. It’s something nobody wants to think about, but not taking care of it can be catastrophic for your loved ones.

Article 1494 of the Maltese Civil Code (Chapter 16 of the Laws of Malta), defines Emphyteusis as follows:

“Emphyteusis is a contract whereby one of the contracting parties grants to the other, in perpetuity or for a time, a tenement for a stated yearly rent or ground-rent which the latter binds himself to pay to the former, either in money or in kind, as an acknowledgment of the tenure.”

Emphyteusis is typical of Continental law (European) and not English law. It is very different from lease or rent of a dwelling house or a piece of land. This is because unlike lease, Emphyteusis is a real right which attaches to the land being contracted and not to the person contracting such right. On the other hand, lease, being a personal right, does not attach to the land or the dwelling house being granted, but only to the person receiving the lease. The legal implications arising out of these differences are considerable, especially with regards to the rights and obligations of the contracting parties.

The contract of Emphyteusis must be made by public deed before a Notary Public. It would be null if done by means of a private writing. Lease, on the other hand may be entered into by private writing and will have the force of law. The contract of Emphyteusis cannot be changed throughout the emphyteutical period. Once the ground-rent is established, it cannot be changed.

Article 1494 provides three key phrases which need to be clarified:

i. perpetuity or for a time

There are two types of empytheutical grants: Perpetual Emphyteusis and temporary Emphyteusis. The former is a payment which must be effected annually with the legal option of redemption. Redemption renders the land freehold. Temporary Emphyteusis, on the other hand, is a contract for a number of years. (Usually in Malta the most popular number of years contracted for are 17 years, 21 years, 99 years and 150 years.)

ii. stated yearly rent or ground-rent

The ‘canone’ or ground-rent must be stated in the contract, under pain of nullity, and is to be paid yearly to the dominus, i.e. the owner of the house.

iii.

The utilista recognizes the fact that he can legally enjoy that property and must acknowledge the dominus as being the real owner of such property.

The contract of Emphyteusis is a sui generis contract whereby the dominus, who is the real owner of the property, is temporarily divested of all his ownership rights. Such rights and obligations are shifted to the ‘utilista,’ the person enjoying such grant, throughout such period. Upon the expiration of the contract, the property, with all the improvements made to it, will revert to the dominus and there will be no right to extend the Emphyteusis.

In the old days, Emphyteusis used to be granted by land owners to farmers who tended the land. Sometimes the agreement would be that as acknowledgment, rather than paying money, the farmer would deliver to the dominus part of the produce, harvest or fruit yielded by that land.

Ownership rights and obligations are, during the running of the Emphyteusis, vested in the utilista and not the real owner. Article 1507 states that the utilista is bound to carry out any obligationimposed by law on the owners of buildings or lands. This demonstrates the responsibility which the utilista has in terms of maintenance of the property. He must treat such property as if it were his own. If, however, there is considerable expense in carrying out such obligation, the utilista may apply before the Civil Court First Hall to demand that the dominus be compelled to contribute a portion of the expense. In such a case the court will take into consideration, primarily, the contract of Emphyteusis entered into by the parties, the remaining period of the grant, the amount of ground-rent and other circumstances relevant to the demand.

The utilista has a very broad right of disposing of the property held under Emphyteusis; he may dispose of the emphyteutical tenement by means of a public deed which can either be an act inter vivos, i.e. made during his lifetime, or causa mortis, i.e. made after his death, in this case, by means of a will. The utilista may sell the Emphyteusis to a third party for a specified amount of money. Obviously, he will be selling the remainder of the emphyteutical period. Moreover, he may grant the property once again under Emphyteusis, known as sub-Emphyteusis, in which case, he will be receiving a ground-rent himself.

Such alienation of property does not require the permission or consent of the dominus, in either case. Moreover, the rights and obligations of the utilista will, upon transfer, be shifted onto the new utilista or sub-emphytheuta. The latter will only become the new utilista after the dominus has acknowledged him. Unless the new utilista is known to be incapable of carrying out his contractual obligations, the dominus cannot refuse to acknowledge him. In cases where the dominus refuses to acknowledge the new utilista, the latter will still remain personally bound to the former for the payment of the ground-rent.

During the period of the running of the Emphyteusis, the utilista has the right to ‘alter the surface of the tenement, provided he does not cause any deterioration thereof’(Article 1506(2)). Thus, if the utilista would like to build further or to add further to the already existing structures on the land, he may do so. Moreover, he is entitled to any ‘treasure trove’ that he may find on such property. The dominus is not entitled to a share.

On expiration of the Emphyteusis, the utilista is bound by law to return the land or tenement with all the improvements made throughout the years during which the property was under Emphyteusis.