Archive for the 'Real Estate' Category

Enforcing a Verbal Contract to Share Lottery Winnings

What if you entered into an oral agreement with someone to share lottery winnings in the event that you won the lottery? That is exactly what occurred between a Florida man, Howard Browning and his former girlfriend, Lynn Anne Poirier. According to Browning, the former couple verbally agreed in 1991 to share lottery winnings with the other if one of them won. In 2007, Poirier hit the jackpot. Instead of honoring their agreement, Poirier had Browning evicted from the home that they had shared for sixteen years. In 2008, Browning sued her for violation of the oral contract, and alleges that he is entitled to $500,000, or one-half of the $1 million, that she won in the lottery.Couple Break Up

Statute of Frauds

After a jury started to hear evidence in the case in 2012, a judge threw out the case, and an appeals court subsequently agreed. However, in May 2015, those decisions were reversed by the Florida Supreme Court, which ruled that Browning should have a new trial. The Court reasoned that the agreement to divide any future lottery winnings is not required to be in writing because it could be performed within one year. This decision is in line with the Florida Statute of Frauds, which says that a lawsuit cannot be filed for breach of a contract that cannot be performed within one year unless the contract is in writing.

Nevertheless, there are conflicting accounts as to the status of the relationship at the time that the winning ticket was purchased. According to Browning, he and Poirier had dined together just prior to buying the tickets. Poirier, however, tells a different story. She says that she purchased the winning ticket when they had already separated.

While the plaintiff is ecstatic that the court sided with him, he is concerned that the defendant may have already spent the funds. A jury must now determine whether the couple really entered into an agreement to split the lottery winnings, and if they were still together at the time the defendant won the lottery.

I really have to admire the plaintiff’s persistence in trying to claim his share of the winnings. Many people, I’m sure, would have just chosen to move on if their former significant other reneged on their promise to split the winnings with them.

Disabled Homeowners with Service Dogs Denied Homeowners Insurance

Disabled homeowners with pit bulls as service dogs were unable to purchase homeowners policies from Travelers Insurance Company. Travelers has been accused by the Fair Housing Council of Oregon of disability discrimination as a result. While pit bulls have a reputation for being very aggressive and for engaging in dog fighting and attacks on humans, their owners often describe them as being very loyal and sweet-tempered.

Last year, officials from the nonprofit agency directed a phone sting in which “testers” pretending to be people with disabilities made telephone calls to Travelers to obtain quotes on home insurance policies. The testers stated that they were the owners of service dogs that were pit bulls. In every instance, the company’s phone representatives refused to provide them with a quote. In May 2015, the Fair Housing Council filed a federal lawsuit against Travelers in Oregon’s U.S. District Court, and named two of Traveler’s agents, Progressive Insurance Corp., and Purdy & Co., as co-defendants.   pit_bull-dark-300x199

The lawsuit alleges that Traveler’s customer service representatives asked the testers if they owned any pets, to which he replied that he had a service dog for his disability, and that the dog was a pit bull. The representative then said that there was a breed restriction policy to which Travelers must adhere, and that Travelers would be unable to provide homeowners insurance because the breed of dog was a pit bull. When the testers asked if the pit bull policy could be waived or modified, the representative said “no.” The responses were the same even if the assistance animal had no history of dangerous behavior or bites.

The Fair Housing Commission of Oregon alleges that Travelers and its agents are engaging in discriminatory housing practices. By failing to provide homeowners insurance to disabled people because they have pit bulls as service dogs, Travelers is having an adverse effect on the ability of disabled individuals to become homeowners.

Travelers and its agents might say there are other insurance companies from which disabled people with pit bulls might obtain homeowners insurance. If those companies don’t have the same pit bull policy as Travelers, then disabled persons with pit bulls could still purchase insurance despite Traveler’s policy. However, if the policy is industry-wide, then that defense will not help Travelers.

Bank Attempts to Foreclose a Widow Even Though Her Home Was Insured

After the 2008 Foreclosure Crisis, many states passed laws to prevent foreclosure abuse. Although these laws are now on the books, the banks themselves were never adequately punished for their fraud. As a result, some major banks continue practices that are clearly unethical and most likely illegal.

foreclosure fraudLaura Coleman Biggs was the target of such a foreclosure practice. Ms. Bigg’s late husband, George Mitchell, had purchased an insurance policy to pay for the principle of the mortgage in the event of his death. The lender, a Bank of America subsidy, had insisted Mr. Mitchell purchase life insurance worth $100,000 to cover the mortgage. This information was kept a secret from Ms. Biggs until April 2015.

Mr. Mitchell passed away in 2003, with $120,000 still on the mortgage. The life insurance policy should have left Ms. Biggs with only $20,000 to pay. However, Bank of America, its subsidy, and the insurance company all failed to notify Ms. Biggs that she had a life insurance payout that could pay off the bulk of her mortgage. Instead, Bank of America continued charging the full $120,000 mortgage. On top of that, the insurance company continued charging insurance premiums even though Mr. Mitchells had already passed away.

By the end of 2011, Ms. Biggs was threatened with foreclosure. Ms. Biggs filed for bankruptcy and the case dragged out for two years. The $120,000 plus “fees” seemed hopeless. Ms. Biggs consulted an attorney, who discovered that the “fees” were not legal fees at all. The “fees” were actually insurance premiums that should have been paid off when Mr. Mitchells passed away in 2003.

After learning about the life insurance, Ms. Biggs filed a lawsuit earlier this year against Bank of America and all parties involved for maliciously conspiring to ignore the insurance policy that allows Ms. Biggs to stay in her home.

Expanding Existing Protection  

Many of the anti-foreclosure abuse laws were written to prevent a procedure known as “dual tracking.” Dual tracking is the lending practice of offering mortgage modification while foreclosing the homeowner at the same time. Banks that use dual tracking are negotiating in bad faith and many states now have laws prohibiting such foul play.

Currently, dual tracking laws only prohibit simultaneous mortgage modifications and foreclosure. However, lawmakers and judges should expand anti-dual tracking laws to include situations like the one Ms. Biggs found herself in. In Ms. Biggs case, there was a pool of insurance money that Bank of America and its subsidiary should have used to satisfy the loan. Bank of America knew the insurance existed because the lender suggested Mr. Mitchell purchase insurance in the first place!

Dual tracking laws should be amended so that banks cannot foreclose homeowners while there are alternative remedies available to the lenders. Dual tracking laws were created so that banks have to exhaust all options before using foreclosure. Mortgage modification is one such option, but insurance payments are another option that banks can utilize before foreclosing a homeowner. Widows should not be thrown out of their homes while banks and insurance companies pocket the profits.

George Lucas Has a Right to Build Affordable Housing Even If His Neighbors Disagree

Back in 2012, George Lucas tried to build a production studio for his company, Lucasfilm, on his Grand Ranch property in California’s Marin County. The median household income of Marin County is $90,000. The county’s board of supervisors protested the construction of the production studio, citing noise, traffic, and environmental concerns. Lucas eventually yielded to the collective wisdom of the council and ended the project

george lucas affordable housingInstead, Lucas proposed building affordable housing in 2013, using money from Lucas Valley Estates Homeowners Association. Once again, the neighborhood protested the project, arguing that the drug dealers, crime, and lowlifes would destroy the character of the county and drop property values.

Earlier this month, Lucas proposed to continue with his affordable housing project, but with his own money this time. The 52-acre project would cost about $200 million and would include a community center, swimming pool, farm, gardens, bridges, and bus stops. Lucas told the media through his lawyer that “We have enough housing for millionaires here; we need some housing for regular working people.”

Lucas Strikes Back

It’s easy to envision what Lucas’s position would be. The project would be on Lucas’s land and paid by Lucas himself. The ranch is his property and therefore he should have the right to build whatever he pleases on it.

The neighbors could raise any applicable zoning laws and possibly nuisance violations. However, the zoning card was already played when Lucas was forced to abandon his studio plans. Now that Lucas is constructing residential housing, the laws restricting construction to residential property are easily satisfied.

Although affordable housing could bring more people, that doesn’t mean affordable housing would bring drug dealers and other unsavory characters. Affordable income is for households with a median household income; affordable housing is very different from transitional housing or non-market project rentals. The latter often attract crime because the residents often turn to non-legal means to make income while the affordable housing deal with workers who make money, but just need a little push to access better housing.

It’s debatable whether affordable housing is a good idea, but Lucas seems to think so. Affordable housing might affect property values, but there is no right to high property value. However, Lucas doesn’t appear to be constructing a slum. With a swimming pool, community center, and gardens, Lucas is constructing an entire community. If managed correctly, a medium household community wouldn’t tank property values. As long as Lucas is willing to pay for and take responsibility for his project, there’s no reason to deny Lucas the use of his own property.

Zombie Properties Create Issues for Neighborhoods across the Country

Recently we’ve all become somewhat obsessed with what’s known as “zombie culture.” Popular movies and shows like World War Z and The Walking Dead spin out tales of survivors of the zombie apocalypse. Some people take these possibilities seriously, and have stocked food and weapons for the apocalypse. There are even entire websites devoted to zombie apocalypse preparedness.

FC land bankHowever, in the real estate world, a different type of zombie outbreak has already begun to gain a foothold in real life. There has been observed an increasingly common pattern of unresolved foreclosure situations leading to what are known as “zombie properties.”

Zombie properties result when a foreclosure proceeding begins, but is never completed because the owner moves out of the home before the foreclosure process can be fully completed. This leaves the property in a twilight-like state- no one occupies the home, but the property remains in the homeowner’s name. Or, there is an extended dispute over ownership of the home, as many banks may be reluctant to claim such properties. Some zombie properties may have no owner and may remain in this state for months or years.

For some communities, zombie properties can create major problems. Properties that are left unoccupied for long periods of time can create pest control issues, plant overgrowth, increased wildlife, and other problems. They can also lead to more serious issues such as crime (the home may turn into a haven for drug trafficking and gang activities). These types of issues can “infect” the overall neighborhood and lower property values. Statistical reports indicate that the most affected metropolitan areas in 2014 were the New York/New Jersey/Long Island areas, and areas in Florida such as Miami, Ft. Lauderdale, and Tampa areas. Other states have been hit hard too.

In my opinion, completely preventing zombie foreclosures might be a difficult task, as they are somewhat of the “fallout” resulting from the mortgage crisis from the past decade. Also, some zombie property situations are difficult to avoid (such as when the previous homeowner suddenly moves to a different state or out of the country). However, being able to identify and address the existing zombie homes can help prevent them from “infecting” the entire neighborhood through disuse and lack of upkeep.

Some possible methods for curbing the effects of zombie foreclosure situations may include:

  • A push for more legislation requiring increased coordination between banks, mortgage companies, and state/local housing authorities.
  • Creation of phone hotlines where neighbors can call to report suspected zombie properties.
  • Streamlined court processes for auctioning off homes that have been deemed as zombie properties (usually homes that have been in that state for at least 3 years).
  • Enforce quicker response times in terms of condemning and demolishing problematic zombie properties.

I think these steps can help to reduce one of the main problems with zombie homes, which is that they are left unattended for long stretches of time. This is a problem that appears to be growing, and will be with us for a while. As such, it’s important for communities and local authorities to begin recognizing the dangers associated with such properties, and begin taking steps towards winning the war against zombie properties. If you notice any homes or properties that might be suspect, contact your local housing authorities, or a real estate attorney for assistance with the situation.