Archive for the 'Real Estate' Category

Racially-Themed Dorms Fair for All?

California State University of LA (CSULA), UC Davis, UC Berkeley, and University of Connecticut (UCONN) have all recently come under scrutiny due to their racially themed dorms.  The concern is that the themed living arrangements—targeted as they are at persons of color—represent a revived attempt at racial segregation. These colleges are far from alone in offering such housing. There are quite a few campuses that offer similar housing arrangements.

The many housing arrangements vary from sections of a dormitory hall reserved exclusively for African-American men (UCONN), to sections of a dormitory hall designed to be focused on respect for the cultures of persons of color (CSULA and UC Davis), to entire houses dedicated to respecting the culture of persons of color (UC Berkely).

Joining these housing arrangements is 100% voluntary. With the exception of the UCONN hall section, all of these housing arrangements are open to any who apply.  The hall sections are all within a fully integrated dorm.  Generally, they are all created with the goal of creating a more comfortable space for persons of color—free from micro-aggressions and bullying.  The exception to this is, again, UCONN’s attempt at themed housing, which has a stated goal of promoting higher retention and graduation rates among African-American men.

My colleague has recently written a truly excellent article, addressing whether or not these themed housing arrangements are, in fact, veiled racial segregation. It notes that racial discrimination is still an everyday experience for persons of color—providing a safe space from hate crimes and bullying is something to be lauded. It also determines, probably correctly, that these themed dorms are not unconstitutional segregation. Dorm 2

However, the possibility of segregation is an extremely dangerous one. UCONN’s African-American male exclusive dorm hall has already drawn complaints from the U.S. Commission on Civil Rights as beneficent racism.  Their complaints cite the words of Dr. Kenneth B. Clark, the psychiatrist whose testimony contributed to the U.S. Supreme Court striking down segregation in schools once and for all—the greatest triumph of white racism would be “to persuade its black victims that segregation was not only acceptable but desirable in itself, and that the justification for this separatism was color alone.”

What are the potential dangers to minority students? What legal liability could the colleges implementing them may open themselves up to?

Segregation and Fair Housing Rules

Suffice it to say Supreme Court decisions and the Civil Rights Act of 1964 work together to make government and private acts of segregation illegal and unconstitutional today. However, despite being made unconstitutional over a half a century ago; segregation is still not exclusively a thing of the past.  With this in mind, the Fair Housing Act exists to prevent discrimination in housing—including in college dorms.

The Fair Housing Act prohibits, among other protected classes, race-based discrimination in housing by public or private actors. The Act protects against many types of discrimination, first and foremost refusal to rent or sell (or make available for rent or sale) a property to somebody based on a protected characteristic such as race. It also bars discriminating in terms of conditions rental or sale, misrepresenting availability of housing, or advertising for housing.  Fair housing claims also frequently arise out of discriminatory application processes.  The act also bars “steering,” or directing somebody to look in a specific place for housing based on a protected characteristic.

Even beyond all these protections provided by the Fair Housing Act, organizations which take grants from the federal government—such as every single university which has introduced racially-themed housing listed above—are held to an even higher standard by the U.S. Department of Housing and Urban Development (HUD). Just last year HUD published a ruled placing an obligation on those who take advantage of certain grants to affirmative further fair housing by taking “steps proactively to overcome historic patterns of segregation, promote fair housing choice, and foster inclusive communities for all.”

What Does This Mean for Themed Dorms and the Universities that Offer Them?

As my colleague determined, these themed dorms are very unlikely to be actual segregation based on the facts in front of us. Just considering that they are open to all who apply by itself points heavily in this direction.  The only program that is actually exclusionary in any sense is the UCONN program that has come under fire—only serving men who identify as black.  Even then, the fact that participation is totally voluntary would undercut most arguments of segregation.  HUD standards explicitly state that the Fair Housing Act does not prevent people from living where they choose—it only prohibits “policies and actions by covered entities and individuals that deny choice or access to housing or opportunity through the segregation of persons protected by the Fair Housing Act.”

The most common complaint now is “reverse racism.” To be blunt, these housing arrangements do not represent discrimination against white people.  While race-based discrimination under the Fair Housing Act does indeed include discrimination against Caucasians, such claims are generally held to a higher evidentiary standard because, not surprisingly, discrimination against majority groups is much more uncommon.

These housing programs are usually open to all who apply and represent a very small percentage of the comparable housing readily available, often within the same dormitory hall. We know nothing of the application and acceptance process.  Even were potentially discriminatory practices to come to light, it seems unlikely that this housing would pose a constitutional issue.

As has been seen with affirmative action in the past—including in the realm of housing—providing opportunities based on race can be acceptable where the purpose behind the policy is to offset previous and ongoing racial discrimination—something that undeniably exists for minorities in the realm of housing.  In fact, under HUD guidelines one could even argue that universities are required to make such safe-space housing available.

When it comes to fair housing generally, the issue essentially comes down to the terms, cost, and quality of the housing they provide. While most of the housing is open to all, housing such as UCONN’s is especially vulnerable to suit if the housing provided is not of comparable quality with other dorm halls.  What’s more, universities will need to be careful about steering.  Even well intentioned prodding towards racially-themed housing may well leave them vulnerable to a lawsuit.

It is important to be wary of any housing program which limits its services to such a narrow group of minorities. While creating safe spaces is indeed to be congratulated, it is crucial to keep an eye on the quality of the services and housing these programs offer.  It is a small step for such a program to move from safe spaces to segregation.

Black Priority Housing: Safe Haven or Return to Separate but Equal?

With most Universities back in session, many college students are settling into their housing, but the months leading up to school may have been riddled with anxiety about student housing.

On-campus housing is offered at most four-year universities. Campus housing is student housing that is owned and controlled by the college campus. It offers several benefits, including an environment where students can meet and befriend one another, on-campus housing (often within walking distance to classes), and may be cheaper than living off-campus.

California State University, Los Angeles (“CSULA”) is the most recent university to offer priority on-campus housing to their African American students. The housing is in response to demands from the campus’ black students who say they experienced insensitive remarks and “macroaggressions” (daily verbal, behavioral, or environmental indignities such as racial slights or insults) from white classmates. University of Connecticut, UC Davis and UC Berkeley already offer similar housing to their black students. Dorm

Proponents of the housing believe students can draw on their common experiences to support one another in black housing. Non-black students are not barred from applying for the housing.

While it is certainly admirable to enact housing regulations in an attempt to make black students feel comfortable on their own campus, the housing can be said to segregate black students. Are CSULA’s good intentions unintentionally contributing to the underlying problem of racism?

History of Segregation

Without going into the details of the horrific way our country treated blacks historically, African Americans have experienced extreme mistreatment, oppression, and inequality based entirely on their race.

In 1896, the pivotal constitutional law case of Plessy v. Ferguson upheld a legal doctrine that would be known as “separate but equal.” Under this doctrine, accommodations for blacks and whites could be separate but were for all intents and purposes supposed to be “equal.” They were not. Blacks had inferior everything – bathrooms, water fountains, schooling, modes of transportation, etc. Things were labeled “blacks” versus “whites” to designate who could use what. It was not a proud time in our history.

It wasn’t until 1954 that the “separate but equal” doctrine was overturned by the Supreme Court case of Brown v. Board of Education. The Court concluded that state laws establishing separate public schools for black and white students was unconstitutional, thereby overturning Plessy v. Ferguson. The case was one of the first acts of the Civil Rights Movement.

We have made great strides since the days of “separate but equal,” going so far as to elect our first African American president in 2008, but we still have a ways to go. Nothing exemplifies the disparity in treatment more than the recent “Black Lives Matter” movement. The movement was created in 2012 in response to Trayvon Martin’s murderer, George Zimmerman, being acquitted for his crime. Since then, numerous African Americans have been killed at the hands of citizen and police who have not been held accountable for their actions.

Will the Housing Stay?

Given the historical context and how many years it took to achieve desegregation, does the CSULA housing revert back to the days of segregation?

Probably not. Themed housing or student communities focusing on cultural identity is not new to college campuses. On-campus housing is offered to students based on their gender. Further, some colleges have “Common Interest Communities,” which provide students the opportunity to live in a space around a common interest, such as a social group, specific major or charity. None of these on-campus housing initiatives have been deemed inappropriate or criticized as a way to foster a culture of segregation within the school.

It is also important to note that CSULA is not the first campus to create black housing for its black students. The housing does not discriminate against peers who are not black, but wish to live in the designated housing. Finally, the housing was a direct result of requests from CSULA’s black students, who felt that some of their white counterparts were acting aggressively toward them.

And we mustn’t forget the case of the freshman African American student, Donald Williams Jr., who was assigned a dormitory suite with seven other suitemates at San Jose State in California. Williams was targeted in a number of hijinks as the only black student in the suite, including his roommates sneaking up behind him to place a U-shaped bike lock around his neck, hanging a Confederate flag in the common room, writing racial slurs on the dry-erase board in the common room, and calling him names such as “three-fifths” and “fraction.” Three of the white roommates were found guilty of a misdemeanor against Williams for bullying, but not for a hate crime.

If CSULA’s housing can prevent bullying or the commission of a hate crime, then they should be welcome at all college campuses.

Rent to Own Homes: Great Deal or Example of Predatory Lending?

When you don’t have a lot of money or you can’t qualify for a mortgage, the thought of buying a home seems like a pipe dream. But for some who dream of home ownership, they’re finding an alternative with rent-to-own homes.

Vision Property Management is a real estate firm that offers rent-to-own contracts. The homes require tenants to make all the necessary repairs within a specified amount of time. The repairs can be minor inexpensive repairs to major costly repairs. Many tenants who sign these contracts have a certain number of months to correct various code violations. If they do not fix the violation within the required time, they are evicted from the property and are out any cost of repair that they spent to bring the home up to code.

How are companies like Vision Property Management buying these properties? The property management company is based in Columbia, South Carolina, and it buys homes through the secondary mortgage market from Fannie Mae. As a result, they’re able to get great deals on homes that have fallen into various states of disrepair, often paying less than $10,000 for a single-family home.

Are these homes a good option for people who want to own but can’t afford home ownership?

Habitability Concerns

One of the main problems with rent-to-own homes is that they often contain conditions that fall below what is considered habitable. Every state is different, although most states require that a landlord provide a tenant a rental unit that is fit for human habitation. In most states, this requires that the rental comply with applicable state or local housing codes, such as minimum requirements for hot water, sewage disposal, and electricity. State law generally requires the landlord make necessary repairs to bring the house up to code and into a habitable condition. House

With rent-to-own homes, there is no such habitability requirement. Tenants must instead bring the building up to code themselves, which can be prohibitively expensive for people who have little funds to begin with. Many have to live with a broken furnaces (ie. no heat) or drainage problems for a period of time until they are evicted for failing to bring the home up to code. In that regard, the landlord benefits from collecting monthly rent while the tenant maintains all the risk of making and paying for all necessary repairs.

Inspections

What’s worse is that these rent-to-own homes don’t first require a tenant inspection. When a homeowner puts in an offer to buy a home, they typically have what’s called an “inspection contingency.” The inspection contingency permits the prospective buyer to inspect the home with licensed professionals in order to determine what, if any, problems exist with the property. If there are problems unanticipated by the buyer when he or she put in the offer, the inspection contingency permits the potential buyer to re-negotiate the contract at a lower price in anticipation of making necessary repairs.

Because rent-to-own homes are not purchased outright and the potential buyer and seller have a landlord-tenant relationship initially, there’s no such inspection contingency. As a result, tenants do not know what they’re getting into when they sign the contract. They later discover the house is riddled with problems and they cannot afford the repairs.

Mortgages

Rent-to-own homes don’t start with standard mortgages. Instead, Vision Property Management acts as the lender while the tenant rents the property and brings it up to code. After seven years of renting and so long as the home is code compliant, the tenant automatically owns the home. It is up to the tenant to find appropriate financing to pay for the remainder of the home.

Since rent-to-own homes are not a typical home purchase, the landlord is not required to comply with various federal and state laws when it comes to lending money. Most notably, landlords need not comply with the Federal Truth in Lending Act (“TILA”), which requires lenders to detail how much interest they are charging and how many payments prospective buyers must make before they own the house. Tenants may not know how much they’re ultimately paying for these homes.

Are these Contracts Legal?

Although there are a lot of risks associated with rent-to-own homes from the tenant/buyer perspective, they are completely legal and could be a viable option for people who don’t have enough money for a large down payment or can’t quite quality for a mortgage, so long as you know what you’re getting into.

Pokémon Go Away: Property Owners Suing Pokémon GO

The phenomenon that is Pokémon GO has swept the nation and the world. However, as this blog has addressed in the past, the way the game works has the potential to draw many different kinds of legal liability.  Less than a month after its release our predictions have come true, the companies behind Pokémon GO—Niantic, the Pokémon Company, and the Nintendo Company—have been slapped with a class action lawsuit.

Pokémon GO is an augmented reality game. Players walk through the real world and find Pokémon that appear in random locations throughout the world.  In order to catch Pokémon, the players must walk within a 40-meter radius of the Pokémon’s GPS location.  The game also includes “PokéStops” and “Pokémon Gyms” which allows players to gather resources or asymmetrically battle other players so long as they are within that 40-meter radius of its location.  Players can even use resources earned in the game to apply a “Lure” to a Pokestop—making Pokémon (and eager players) come to that location.

The lawsuit, brought on behalf of New Jersey personal injury lawyer Jeffrey Marder, alleges that Pokémon GO creates a nuisance and unjustly enriches itself through its use of private property as locations for PokéStops, gyms, and Pokémon without permission from the owners.

The world of augmented reality games is a very new one, and full of new issues of law and fact. Both of the charges of this lawsuit raise new and interesting issues.

A Poké-Nuisance

A nuisance claim requires a showing of an unreasonable, non-physically invasive use of their property where the use substantially interferes with the quiet use and enjoyment of that property.

Non-physical invasions can include things like loud noises, pollution, vibrations, or excessive light. Here, the lawsuit argues that the invasion is the additional foot traffic of players coming to catch Pokémon and use PokéStops, the noise they make, and the occasional gamer walking up to your door and asking if they can come in and catch a Pokémon. Due to the fact that nuisance does not require a physical invasion, the fact that PokéStops only require people to come within a 40-meter radius does not prevent liability.  A PokéStops on or near your property would still suffice, so long as it created an invasion that could be called a nuisance.  So the question is, does this rise to the level of a nuisance? Pokemon Go 3

An invasion needs to fulfill several requirements before it is considered to be a nuisance. First, the invasion must be a foreseeable result of the actions of the person accused of nuisance. In this case, the goal of the PokéStops is to draw as many players as possible into the game.  Thus, it seems clear that people using the PokéStops that you place is foreseeable.  It also seems foreseeable that where a large group gathers around private property, their presence could be noisy and disruptive—although there is some argument as to how much disruption could be predicted.

The invasion must also be substantial—more than the usual noise off the street. This is a tough standard to break down, as it highly fact specific. Whether a specific PokéStop has actually created a nuisance might depend on exactly how many people were drawn to the PokéStop and what they did while they were there.

Finally, the invasion must be unreasonable. In order to determine this, the court looks at several factors—how bad the harm was, how long the harm went on, how hard it would be for the defendant to prevent the harm, and the value of the defendant’s conduct to society.  The balance of harms here would, once again, depend on the exact extent of what happened.  However, it probably wouldn’t take a great deal to outweigh the difficulty of not using these locations and the social benefit of a mobile game.

As it is, the actual harm that has been shown by Mr. Marder is pretty tame—maybe not rising to the level of a true nuisance.  However, augmented reality is new.  There is no case addressing whether placing digital landmarks on or around your property could be—by itself—a non-physical invasion of your property just like smoke or excessive light.

This nuisance case has some question marks moving forward, especially considering it contains never before addressed issues. However, it’s also notable that the lawsuit doesn’t bring a claim for trespass—a similar claim to nuisance but with a physical invasion of the property.  This is probably because any trespass that has taken place was done on the initiative of the players, not Pokémon GO.  Pokémon GO has a trainer guide which advises players to always respect the community and adhere to the rules of the real world.  Their terms of service require players to not violate the legal rights of others.  It’s unlikely that Pokémon GO would be liable for the trespass of their players.

Unjust Enrichment

The lawsuits second charge, unjust enrichment, is one of oldest concepts of law—people shouldn’t be able to unfairly get ahead at the expense of another without compensating the other person.  In order to establish a case for unjust enrichment you need to show just that, along with the fact that equity demands you be repaid for what was taken from you.  This issue is especially important in this lawsuit because it represents the majority of the potential for damages in this case.

The lawsuit argues that by using the private property for their games, they have increased the value of their game. They argue that, because they did not pay or even ask permission for this use, they have been unjustly enriched.

Whether this gives rise to a case for unjust enrichment hinges on one very important question.  A question that has not been addressed by the courts before and will change the future of augmented reality gaming.  Does owning property in “the real world” extend property rights to any digital, location specific, intellectual property elements that may be put on it?  If so, not only does the lawsuit have a strong case for unjust enrichment, it would make augmented reality gaming incredibly expensive to implement.  It would essentially force game developers would limit their games to public areas.

The Pokémon GO Lawsuit Going Forward

The lawsuit has already led to action by Niantic, they’ve issued an update with specific warnings not to trespass built into the game. They’ve also promised to be more transparent with the process of removing PokéStops, a function which has always been available.

It’s not surprising that they’re taking the lawsuit so seriously; the lawsuit seeks damages in excess of $5M—although it is not specific about what, if any, damages Mr. Marder has suffered—and an order preventing Pokémon GO from using private property without permission. An order like that would make it much harder for an augmented reality game to function, especially where nuisance law prevents you from even bringing players into the immediate vicinity of private property.

Augmented reality is new and it’s huge. This isn’t the last case we will see dealing with these issues.  For now, we’ll have to wait and see whether this case will change the landscape of these games forever.

Prince’s Supposed Heirs Fight Over His Estate

“When Doves Cry,” “1999,” “Little Red Corvette,” “Purple Rain” – Prince Rogers Nelson had a number of hit songs. Throughout his career as a singer, songwriter, record producer and actor, Prince amassed $300 million dollars.

It was a shock when Prince passed away suddenly on April 21, 2016 at the age of 57. The cause? An accidental overdose of opioid fentanyl. Fentanyl is prescribed by doctors for cancer treatment, but it can be made illicitly and is blamed for a spike in overdose deaths in the United States. It’s 25 to 50 times more potent than heroin and 50 to 100 times more potent than morphine. Prince had no known living children at the time of his death. Prince

Now, Prince’s $300 million dollar estate is being sought after by his six siblings and numerous others who claim to be his secret love children, his nieces and nephews, and even secret siblings. A Minnesota judge overseeing Prince’s estate narrowed down the wide pool of potential heirs ruling out nearly 30 claimants. The judge also ordered genetic testing for six purported family members.

What could Prince have done to avoid all this fighting over his estate?

What is Estate Planning?

Prince should have created an estate plan, and so should you.

You may not think that you need an estate plan, but if you own anything, including your car, home, other real estate, checking and saving accounts, investments, life insurance, and personal possessions, an estate plan is wise.

You probably have an idea of how you want to distribute your possessions after you pass away. An estate plan helps ensure your wishes are met by specifically naming whom you want to receive things you own after you die. An estate plan can either be in the form of a will or a living trust. A will provides instructions on how to distribute your belongings after you die.

However, any assets titled in your name or named in your will must go through your state’s probate process before they can be distributed to your heirs. In layman’s terms, probate is a legal process the court takes to conclude all your legal and financial matters after your death. It can be a long and arduous process, especially for heirs who are waiting to move on from the death of their loved one.

Because wills still need to go through probate, a living trust is preferred by most families and professionals. Unlike a will, the trust doesn’t die with you. Instead, any assets in your trust can remain in trust until your beneficiaries reach the age you want them to inherit. For example, if you die when your child is only five but you don’t want your child to be able to access your assets until your child is twenty-five, a trust can ensure that your child will have to wait another twenty years.

A trust is more expensive upfront than a will, but because a trust avoids court interference (ie. probate), most people prefer paying more for a trust than a will.

What Happens if You Don’t Have an Estate Plan?

Each state has its own laws, but a person who dies without a will or trust will have his or her estate distributed and determined by the state’s probate court.

Prince passed away in his home state of Minnesota. If you pass away in Minnesota without a will or trust, your property is distributed through probate via intestate succession. In Minnesota, your spouse receives the entirety of your estate after debts and taxes, unless the person who passed away (known as the decedent) has children who are not also the children of the spouse.

In that case, the spouse receives the first $150,000, and the balance is divided among the children. If the decedent has no spouse and no children, the closest living relative (such as the sibling) will receive the estate. This is why Prince suddenly has a number of people claiming to be his relatives, most of whom he probably never met during his lifetime.

Let Prince’s ordeal be a cautionary tale of what could happen if you don’t have an estate plan.



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