This was one of those rare Supreme Court cases that grabbed the public’s attention.

And why not? Its facts hit close to home for a lot of people: private homes and small businesses were bought by the government, without the owners’ consent in some cases, and demolished, in order to build a new business district (with a corporate campus for the Phizer drug company being the centerpiece), with the hopes of revitalizing an economically depressed city. Some owners brought their case all the way up to the U.S. Supreme Court, arguing that the government’s eminent domain power under the Fifth Amendment to the U.S. Constitution (“private property [shall not] be taken for public use, without just compensation”) did not extend to the taking of private property, for the purpose of transferring it to another private party (in this case, Phizer and some private developers), and that “public use” meant that the land taken must actually be used and owned by the public.

The Supreme Court, in a 5-4 decision, disagreed, and found that the taking served a “public purpose”, in that the new development would attract businesses, create jobs, and increase tax revenue, which would be used to expand or maintain public services. As a result, the taking went forward, the last few holdouts were removed, and the complex was built.

The reaction to this case was almost universally negative, across the political spectrum. Conservatives and libertarians argued that it allows governments to take private property for almost any reason, with barely a pretense of the taking serving some public necessity. Liberals argued that the decision amounts to a handout to any big private developer which happens to have some political connections. In short, the decision made almost nobody happy. As a result, many states passed laws limiting the use of eminent domain by local governments.

Being almost 5 years old, this case hasn’t garnered much attention lately, until now. It was just announced that Phizer is closing the facility that was the center of this dispute, taking with it 1,400 jobs, and leaving a vacant office park and a bunch of empty lots where homes and businesses used to be.

What does this say about the merits of the Kelo decision? Well, from a strictly legal standpoint, not much. The Supreme Court, if it ever decides to revisit the issues raised in Kelo, would probably say that it doesn’t matter what happens after the fact, even if the taking ends up not benefiting the public in any significant way. After all, developers and governments can’t see the future.

As a practical matter, this might be an indication that governments aren’t very good at making these kinds of decisions.

However, if LegalMatch case statistics from the last 12 months are any indication, the average person probably has little reason to fear the government swooping in and condemning their property. According to our data, relatively few clients sought lawyers for eminent domain issues in the last year. Of those, a plurality of cases are still in their early stages (the property has been appraised or the government has made an initial offer to buy). At this point, it is far from a sure thing that a taking will actually occur.

This may reflect more the changed state of the economy (not too good, in case you haven’t noticed), and less a governmental policy switch on the use of eminent domain.  Stay tuned.

Phizer Leaving New London 5 years after Supreme Court Eminent Domain Ruling is a post from: LegalMatch Law Blog

Those are the adjectives that the neighbors of British couple Caroline and Steve Cartwright use to describe the couple’s sex life.  Yes, you read that last sentence correctly.  More specifically, the neighbors have been complaining that the noise keeps them up at all hours of the night, thus causing them to oversleep in the morning and make them late for work.  The problem happens almost every night.

So what do they do about this problem?  The neighbors decided to charge the wife with noise violations and seek an abatement, which they subsequently won.  The noisy couple appealed, but despite their best arguments that their Human Rights were being violated, their appeal was denied.  Since the initial ruling, Caroline has been found to be in violation of the noise abatement order three times.

Aside from the humor of this situation, there are some interesting legal issues dealing with noisy neighbors.  According to a U.S. Census Bureau survey, American consistently rate noise ahead of traffic and crime as their primary reason for wanting to move.  LegalMatch has a helpful recommendation for dealing with the problem of unreasonably noisy neighbors: approach them about the problem before seeking legal recourse.

I totally agree with this approach and the rationale that friendly communication should be used before the police and the courts get involved.  After all, theses are your neighbors and if you can salvage a friendship or at least a peaceful relationship then you should try.   There are also simple solutions such as caulking and sealing the edges of windows, doors, and outlets that face the noise source.

If that still doesn’t work, then you may be forced to hire a lawyer to seek your own noise abatement and/or money damages.  So for all you readers who have annoying neighbors who start construction too early, let their dogs bark at all hours, and have loud late-night parties, just think how much worse it can be!

Not Your Ordinary Noisy Neighbors is a post from: LegalMatch Law Blog

Anyway, the reason why I was thinking about my intellectual inadequacies is because sometimes you just see a news story and realize how much there is to know in this world and also how little of it that you actually know.  For instance, is there any reason why regular people like you and me can’t keep chickens as pets?  Because apparently there’s a movement in Ann Arbor, MI to get the city to pass an ordinance that would allow its residents to keep chickens as pets.

Really, is this an issue?  I had no idea there was even a problem with doing this, let alone that it was illegal.  I remember when I was a wee lad my neighbor had a couple of chickens in his backyard.  He’d feed them corn, harvest their eggs, and occasionally even allow them to berth a couple of chicks.  This all wouldn’t be so strange except that I grew up in a major urban California city.  Though I never thought twice about it when I was a kid, I just thought my neighbor really liked fresh organic eggs and playing farmer.

Coincidentally, the organic food movement is what Stephen Kunselman, the Ann Arbor councilman spearheading the move to pass the ordinance, is using as the basis to promote chickens as pets.  Supposedly, fresh eggs are a lot tastier and healthier for you than what you get at the supermarket.

Sounds great right?  Except that a lot of residents and the local Ann Arbor government are clucking (HA, I’m so witty) about the health and safety issues that come with owning chickens.  Apparently there’s a concern that allowing people to keep chickens as pets will encourage or at least not help to stem the spread of avian bird flu – which I hear is pretty nasty.  There’s also the issue of noise disturbance – less we forget what it is roosters are known for besides providing hours of entertainment (I’m joking, please no letters).

Anyway, all this got me thinking about chicken laws in other cities, specifically what’s the penalty for owning chickens?  Well, it ranges from fines to a misdemeanor depending on the circumstances (e.g. number of chickens, sanitation issues, etc.).  For those of you interested in keeping a chicken(s) as a pet(s), I strongly suggest you check your local laws to find out whether it’s legal.  The internet is an amazing place, by the way, so be sure to use it.

Don’t Cluck With My Heart: The Legality Of Keeping Chickens As Pets is a post from: LegalMatch Law Blog

Anyway, like a lot of people in my economic bracket, no one in my family has ever experienced the joy of property ownership.  We were born renters and will likely die renters –  hopefully not me though (this law stuff better pay off).  And also like most people not coming from inherited wealth, previous generations of my family didn’t have the best education in the world, if any, as I’m sure most countries with a dictatorship government probably don’t want their citizens developing a mind of their own.

What happens when you put all of this together?  You get a long line of people with only, at best, a tenuous understanding of their rights.  Not to mention an innate distrust of authority or that authority’s ability to protect them.

It’s no surprise then why so many people in this country have no idea what their rights are as tenants.  Though it’s likely that a lot of people have a natural sense of what is right and what is wrong, for some reason when it comes to an injustice being perpetrated against them as a renter, these people are more inclined to let those things slide for fear of rocking the boat and suffering some incredibly painful consequence from their almighty landlord.

Get hit by a car and chances are you’ll likely want the driver who hit you brought before justice and sued in civil court.  But if the heat in your apartment is broken or your plumbing is backed up and your shower lacks water pressure, then for some reason you can live with it.  Aside from the obvious disparity between getting dinged by a car versus having to take cold showers (I’ll try to make more equal comparisons in the future), the distinction doesn’t make much sense, huh?

Now the terms in least agreements vary from property to property, so you might not always have a legitimate dispute (though that’s not to say it’s not possible to sue for almost anything these days).  In general, all states in the country generally have some law or statute in place ensuring that tenants are allowed the right to reside in a property free from health and safety hazards, as well as being of livable standards.  Note that the latter condition is very broad and open to much interpretation.  Depending on the state, it can sometimes favor the tenant or the landlord.

Recent case statistics from LegalMatch indicate that citizens from poorer states, such as Maryland, file, on average, over 70 percent less claims alleging tenant rights violations than people from wealthier states, such as California.  From an optimist’s point of view one might think that there are less renter rights violations in those states.  However, from a more realistic perspective, such violations are probably just as prevalent everywhere you go in the country.

So the lesson here is that you shouldn’t be afraid to rock the boat.  You have rights as a renter and should exercise them.  And if you really need it, sit down with a good tenant’s rights attorney.

Renter’s Rights? Yes, They Are Real is a post from: LegalMatch Law Blog

The popular assumption among the general public seems to be that some special body of law applies on the internet that doesn’t apply in real life. This assumption, as some people have learned the hard way, is incorrect. While there has been much debate over the particulars of how certain areas of the law should apply online, there’s never been any serious debate as to whether it applies.

Enter Amanda Bonnen. She is being sued by Horizon Group Management on a theory of libel for a “tweet” in which she made an offhand complaint about mold in her apartment. According to the complaint, the statement about mold in the apartment is, of course, completely false, and caused irreparable damage to Horizon’s reputation.

This may or may not be true, and that’s not what makes this case interesting. What does make it interesting is how this statement was made, followed by the lawsuit, and the public reaction to it.

It is entirely possible that Ms. Bonnen’s statement was false, and that it did, in fact, cause some damage to Horizon’s reputation. In that case, the lawsuit has merit, and Horizon should, as a legal matter, prevail.

But if they were acting to vindicate their reputation, they could not have gone about it in a worse way. A search on Twitter’s website for “Horizon Group” reveals that almost everyone who has heard about this matter is not very sympathetic with their cause. Besides some childish insults flung at the company (my personal favorite describing Horizon employees engaged in unsavory acts with barnyard animals), and some creative spellings of the word “frivolous,” one can see that many people now assume that Horizon has moldy apartments, whether that assumption is true or not.

So, what have we learned from all of this? Well, everyone involved should have learned some valuable lessons. First off, Ms. Bonnen has learned that if you wouldn’t say something in person, you shouldn’t say it online (as it turns out, there are a lot of people on the Internet who might read what you’ve written). Horizon has learned that filing a lawsuit is not automatically the best way to deal with a problem.

140 Characters Away From a $50,000 Lawsuit is a post from: LegalMatch Law Blog

If you are a renter, like myself, and able to afford city life then this is the prime-time to enter into a lease in an apartment at a lower rental cost.  I have seen some of my friends move out of their beautiful high-rent apartments in attempts to save money by moving home, getting roommates or moving to a cheaper location.

Perhaps “Renters Paradise” was a little much for my blog title, but the number of vacant apartments out there is almost at unprecedented levels.  Unfortunately, so too are the factors that tether this fact back to reality: unemployment and economic uncertainty.

According to a recent study, U.S. apartment vacancies are nearing a record low.  Currently at 7.5% and projected to increase, the rising figure reflects the difficult economic times.

Not surprising, the struggling real estate and rental industries are accompanied by an increase in legal problems and litigation.  A study conducted by LegalMatch, looking nationwide at the past 12 months saw a rise in legal inquiries across the board in the Real Estate category.  Landlord tenant issues are on the rise as landlords are feeling the pinch and tenants are demanding more concessions and lower rents. I agree with a recent Yahoo News article that attributed much of the rental issues to the employment problems that have befallen the 18-24 year old category.

Obviously, the effects increased vacancies are having will not be isolated.  An interesting prediction regarding falling home prices relationship to the rental market was articulated in a recent Wall Street Journal article.  The author felt that falling home prices could hit landlords in two ways: “they could force landlords to lower rents to keep up, and could spur some renters to purchase homes. Still, the number of renters who move out to purchase homes isn’t expected to surpass levels seen during the housing boom earlier this decade.”

Whether a renter or buyer these are really interesting times to explore your financial options and research the best financial approach to housing for you!  Don’t be afraid to negotiate your rent, demand concessions at your current location, or look into buying.

Renter’s Paradise… If You Can Afford It! is a post from: LegalMatch Law Blog

Take the experience of Charleen Trana a 78 year-old widow living in her San Fernando home of 50 years, worth at least $350,000.  (Dreams Foreclosed: The Rampant Theft of American’s Homes Through Equity Stripping Foreclosure “Rescue” Scams) Because her disabled son was having difficulty maintaining jobs, Trana took out a $100,000 mortgage on her home to help him.  However, when Trana’s health began to fail, her costs skyrocketed.  She fell behind in her mortgage payments. Trana received a notice of default, but that wasn’t all that she received.  Some very nice men approached her days later and offered to rescue her home from foreclosure. Desperate, Trana signed her property deed over to these men for a small sum down.  She also signed inch-thick documents with the promise that these rescuers would not only pay off her mortgage but, in exchange for rent, Trana could continue to live in her home.  But, there was a catch; the rescuers failed to pay-off the mortgage, leaving Trana on the hook both for the mortgage and the rent while they held the deed (and equity) to her home! 

Trana’s story is not atypical.  Indeed, the Federal Trade Commission (FTC) just announced a new crackdown in foreclosure equity stripping schemes.  (Federal and State Agencies Crack Down on Mortgage Modification and Foreclosure Rescue Scams)  One of these schemes concerns loan modification scams.  Firms involved in these scams use on-line ads, spam, and direct mail targeted to homeowners in financial distress, promising high success rates at modifying their mortgages and saving their homes.

While LegalMatch does not specifically track foreclosure equity scams, we have had an explosion of customers contact us during the past year either because a foreclosure had been filed against them or because there was a foreclosure judgment. 

RECENT EXPLOSION OF LEGALMATCH CUSTOMERS SEEKING ASSISTANCE WITH FORECLOSURES

If you suspect that you’ve been approached by a rescuer, contact your local District Attorney and report the individual(s) to the FTC.  If you’ve been a victim of a loan modification or a foreclosure equity scam, you may either be able to file criminal charges or bring a lawsuit against the rescuer for damages.  LegalMatch has many experienced real estate attorneys who can assist you in determining the best course of legal action.  Whatever you do, don’t sign your property deed over until you’ve consulted your local agency or licensed attorney to ensure that you aren’t a victim of a foreclosure equity scam!

Federal Trade Commission Home Equity Scams

National Consumer Law Center

U.S. Dept. of Housing and Urban Development Guide to Avoiding Foreclosures

When It’s Too Good to Be True: Foreclosure Equity Scams is a post from: LegalMatch Law Blog

That’s a lot of money to owe on your house. It might also give us a clue at the depth of the current financial crisis.

“Toxic Assets” have become the new buzzword during this financial crunch, just like “weapons of mass destruction” started rolling off everyone’s tongues in 2003. What are these toxic assets? Most of them are convoluted investment packages that represent a hodge-podge of upside down mortgages from around the country. In other words, big mixed-up sacks of worthless investments that no one wants. The total “value” of these toxic assets is unknown, and probably never will be known. (Part of the whole problem was they were never actually worth what everyone thought they were.)

What can be guessed at, however, is how much money mortgagors were owed in 2008, and how much they are now looking at as potential losses before recouping anything in foreclosure sales. (I.e. the loss these toxic assets might represent on balance sheets). To do so we can use two rather modest assumptions: $200,000 median debt-per-household based on LegalMatch data, and the (low-end) estimated total number of foreclosures in the US in 2008, which was 2 million according to CNN. Putting these numbers together, we get a staggering $400 billion in total outstanding debt in the U.S. housing market. That’s quite a lot of money, and that is probably an estimate on the low end.

However, haven’t we spent something like $10 trillion in bailout money so far? Or at least promised that much? Even if my estimate is off by a magnitude of 5, we’ve still spent more than that already. What if we had spent a few trillion simply paying off overdue mortgages? A “trickle-up” economy, as opposed to the old “$@*# rolls down-hill” approach. Almost every day we are bombarded with news about bailout this, bailout that, trillion dollars here, hundreds of billions of dollars there. I haven’t seen any of this money, have you? (Well maybe if you work for AIG).

Now before someone says that is just rewarding people for their own shoddy financial planning, what are we doing for the banks and firms such as AIG? Banks and their enabling financial partners created an artificial market where risky mortgages not worth the paper they were printed on were sold off as if they were written in gold-ink. How is it somehow more appropriate to reward them for their misdeeds and not the taxpayers who are footing the bill anyway? These are the institutions that invested your 401K in your neighbor’s upside-down $1 million McMansion mortgage. If your neighbor stays in his home for the same inflated price he mortgaged it for, at least your home price won’t plummet due to a cramdown or foreclosure sale.

I’m not a financial expert, but I like to play one online. Where am I going wrong with my populist approach?

Average U.S. Homeowners Facing Foreclosure Owe $200,000, LegalMatch Data Shows is a post from: LegalMatch Law Blog

According to LegalMatch statistics, foreclosure rates from 2007 to 2008 jumped by over 150%. This staggering increase closely mirrors the precipitous drop off of home prices in the US during 2008, when the median value of an American home dropped by 18% in twelve months.

LegalMatch data correlates with national statistics compiled by industry experts showing a 76% increase in foreclosure rates between 2006 and 2008. Are house prices to blame for this huge downturn? Partially. A number of home owners and home speculators alike took advantage of a lull in interest rates between 2000 and 2005 when introductory interest rates on adjustable rate mortgages dropped to the 4-6% range. During this time housing prices were also artificially high and seemingly rising without end, so buyers saw a potential win-win situation. Sub-Prime Adjustable Rate Mortgages ( ARM) fueled the flames of the bubble and allowed speculators and new home buyers alike to enter the market at cut-rate introductory rates that jumped massively one or two years down the road.

Home owners who saw low rates and rising prices in 2005 and 2006 took the bait, thinking things would continue to get better. When interest rates continued to rise and these so called “exploding” ARM loans almost doubled between 2006 and 2007, owners who failed to sell prior to 2008 saw the value of their homes plummet to prices far below the amount owed on their mortgage. Unable to keep their heads above water, homeowners with upside-down mortgages in 2007 and early 2008 faced foreclosure judgments in mid-2008 and 2009, as shown by the LegalMatch stats above.

This enormous well of unpaid debt coincided with the breaking news of financial collapse of some of the nation’s biggest financial firms such as Bear Sterns, Lehman Brothers, and the now infamous AIG. It is no coincidence that trillions of dollars in investments insured and managed by these firms was inextricably tied into these bad loans and defaulting homeowners. Securities backed by these worthless mortgages are the kinds of things people are referring to when they talk about “toxic assets.”

Although it was not the sole cause, the housing crisis has a tremendous impact on the financial health of this country. When it dramatically explodes like it did in 2008, the shockwaves spread everywhere throughout our economy. As these trends continue to shake out we will be watching the data, so stay tuned for more updates on where the housing market, and our economy, may be headed.

LegalMatch Data Shows Foreclosure Rates Skyrocketed in 2008 is a post from: LegalMatch Law Blog

1. Give me general advice on how to proceed to protect my interests: 30%
2. Bring a lawsuit against the other party: 25%
3. Act as my agent in the transaction: 14%
4. Assist me in the remaining stages of the transaction: 13%
5. Other: 10%
6. Defend against a lawsuit filed by the other party: 5%

Thankfully, the vast majority of people are securing legal advice at the right time; i.e., before the deal goes down the tubes. Considering the fortune you are about to put down on your investment, it is always a good idea to get a legal assessment of a real estate contract, as well as legal advice concerning your rights and liabilities.

Unfortunately, 30% of people coming to LegalMatch.com have waited until something went terribly wrong to hire an attorney. This predicament is not unique to real estate. In almost every facet of society, lawyers typically do not get involved to prevent bad things from happening. They get involved once the mess has been made.

Now as lawyers we don’t always mind this. After all, we get paid to clean the mess up. And from a client’s perspective, not wanting to hire a lawyer until it is absolutely necessary is understandable. Attorney fees, even for an hour of advice and consultation, are expensive. (Arguably too expensive). It’s no secret there are also unsavory attorneys who will claim this or that needs to be done to try and milk even more of a client’s time.

For clients, however, the old adage that an ounce of prevention is worth a pound of cure rings true. Solid legal advice before a big investment, a major business deal, or any significant endeavor can save lots of money, time, and anxiety down the road. One hour of a good lawyer’s time is a heck of a lot cheaper than one month.

Top Reasons Clients Seek Lawyers in Real Estate Transactions is a post from: LegalMatch Law Blog