Tagged: Title

NJ Appellate Division Case Highlights Importance of Thorough Due Diligence Regarding Properties Containing “Abandoned” Railroad Lines

NJ Appellate Division Case Highlights Importance of Thorough Due Diligence Regarding Properties Containing “Abandoned” Railroad Lines

The conveyance of property containing embankments or former railroad facilities may invoke complicated title issues that could lead to significant costs and delays for real estate purchasers seeking to develop the property if such issues are not adequately addressed prior to the acquisition. On January 23, 2019, the New Jersey Appellate Division issued an unpublished decision in 212 Marin Boulevard, LLC, et al. v. Chicago Title Insurance Company and Consolidated Rail Corporation, concerning a party’s alleged misrepresentation about whether the conveyed embankment property was subject to the Surface Transportation Board’s (“STB”) abandonment authority. The STB is the federal agency established to oversee rate and service disputes for railways, as well as railway restructuring transactions, including abandonment of rail lines. Presumptively, any abandonment of rail lines by an entity regulated by the STB requires STB approval, unless excepted under federal statute. The seller, Consolidated Rail Corporation (“Conrail”), represented to Chicago Title Insurance Company (“Chicago Title”) that STB abandonment was not required, and Chicago Title, in apparent reliance on this statement, issued policies for the conveyed parcels when the purchaser closed on the property. Even so, the Appellate Division rejected Chicago Title’s third party complaint against Conrail for negligent misrepresentation. The decision...

New Jersey Supreme Court Adopts O’Brien Factors For Determining When Real Estate Transactions Constitute an Equitable Mortgage 0

New Jersey Supreme Court Adopts O’Brien Factors For Determining When Real Estate Transactions Constitute an Equitable Mortgage

Founded on the principle that equity looks to substance over form, courts will find an equitable mortgage to exist when a deed or contract, while lacking the characteristics of a typical mortgage, is used to pledge an interest in real property as security for a debt with the intention of acting as a mortgage. On September 9, 2014 in Zaman v. Felton, the New Jersey Supreme Court decided that when determining whether a particular transaction gives rise to an equitable mortgage, a trial court must utilize the eight factor test set forth by the Bankruptcy Court for the District of New Jersey in O’Brien v. Cleveland.

The Philadelphia Land Bank – What You Need to Know 0

The Philadelphia Land Bank – What You Need to Know

One stop shopping. That is the goal of the bill that Philadelphia Mayor Michael Nutter signed into law on January 13, 2014, creating the Philadelphia Land Bank. The Land Bank, which is to be fully operational by the end of this year, is intended to streamline and consolidate the process by which the City acquires and sells vacant and tax delinquent properties. The Land Bank will also act as the single repository for the approximately 9,500 vacant and surplus properties currently owned by the City through three separate entities: the City, the Philadelphia Redevelopment Authority and the Philadelphia Housing Development Corporation.

From Ink to Occupancy – Part Three: Land Use Due Diligence – The Title Myth 0

From Ink to Occupancy – Part Three: Land Use Due Diligence – The Title Myth

As the third installment in the series, “From Ink to Occupancy, A Game Plan for a Successful Real Estate Project,” stemming from the Gibbons Women’s Initiative Seminar Series held in May, this blog addresses the question of whether title review alone is sufficient for purposes of ascertaining what restrictions are in place for a property being acquired. The simple answer is NO. All too often commercial buyers anxious to close on a property take shortcuts and limit their due diligence to title review as opposed to conducting land use due diligence. This blog explains why, particularly in New Jersey, it is critical to conduct land use and zoning due diligence in addition to title review prior to the acquisition of a property, so that you can be fully aware of any potential restrictions impacting the property.

The Time for Electronic Recording is Now: New Jersey Passes New Law Updating Title Recordation Procedures 0

The Time for Electronic Recording is Now: New Jersey Passes New Law Updating Title Recordation Procedures

In our electronic age, New Jersey’s antiquated laws governing document recordation were in serious need of some updates. A new law was recently passed modernizing the New Jersey Statutes by requiring the acceptance of electronic alternatives to paper documents, in addition to paper documents. In addition, provisions of the statute, disbursed over various sections that logically belonged together, have been compiled in a more concise and coherent fashion, and antiquated language and procedures have been removed. The revisions clearly result in a much more reader- friendly version of the law relating to title recordation in New Jersey. Assembly Bill A-2565 P.L.2011, c.217 revising the New Jersey statutes pertaining to the recording of title documents was signed into law by Governor Christie on January 17, 2012. The New Jersey Law Revision Commission (NJLRC) approved this revision project following the enactment of the federal Electronic Signatures in Global and National Commerce Act (E-sign), and New Jersey’s enactment of the Uniform Electronic Transactions Act (UETA). The legislative statements (Statements) issued by the Senate Community and Urban Affairs Committee (Senate) and Housing and Local Government Committee (Assembly) related to A-2565 note that “while the use of electronic deeds and mortgages is not expected to occur in the near term, both E-sign and UETA encourage the development of systems that will accept electronic documents without disrupting the ongoing process of title recordation.”

Pennsylvania Appellate Court Injects Uncertainty Into Fracking Industry 0

Pennsylvania Appellate Court Injects Uncertainty Into Fracking Industry

An 1881 deed and an 1882 Supreme Court decision formed the background for a very modern controversy recently addressed by the Pennsylvania Superior Court. The decision, Butler v. Estate of Powers, casts a shadow over ownership rights in natural gas contained in the Marcellus Shale formation, and has left many companies in the “fracking” industry uncertain about what they own.

Orange County Clerk’s Office Closes, Preventing Property Searches and Threatening to Delay Real Estate Closings 0

Orange County Clerk’s Office Closes, Preventing Property Searches and Threatening to Delay Real Estate Closings

Due to building conditions resulting from recent heavy rains, the County Executive of Orange County, New York, closed indefinitely the Orange County Government Center as of 3:00 p.m. last Thursday. In a press release, Orange County Executive Edward A. Diana announced having “ordered that the building be closed until further notice as we evaluate and remediate the situation.” The Orange County Government Center houses the County Clerk’s Office, among other government offices.

Due Diligence in Acquiring Distressed Debt — Part One 0

Due Diligence in Acquiring Distressed Debt — Part One

There is no shortage of buyers anxious to buy distressed mortgages. The simple reason is the possibility of substantial profit if a loan can be purchased at a significant discount and there is a realistic possibility that the borrower or, if it forecloses, the lender, will be able to salvage the property. This is the first of two articles about counseling clients in acquiring distressed commercial mortgage loans. Bankruptcy, special assets such as condominium properties and UCC foreclosures are beyond the scope of these articles.

Kick the Tires and Check under the Hood: Due Diligence Provisions in Pennsylvania Agreements of Sale; Posting 3 of 3 0

Kick the Tires and Check under the Hood: Due Diligence Provisions in Pennsylvania Agreements of Sale; Posting 3 of 3

Of the pre-closing due diligence triad, the property investigation almost always covers the most ground. While representations and warranties will help you spot and clarify issues during the negotiation of the Agreement of Sale, and title review will identify and locate recorded encumbrances, the property investigation is where the Buyer gets its hands dirty.

Kick the Tires and Check under the Hood: Due Diligence Provisions in Pennsylvania Agreements of Sale; Posting 2 of 3 0

Kick the Tires and Check under the Hood: Due Diligence Provisions in Pennsylvania Agreements of Sale; Posting 2 of 3

Title review, like the negotiation of representations and warranties discussed in my earlier post, is an invaluable tool in determining whether to purchase a property. Analysis of the encumbrances recorded against the parcel is akin to reviewing a vehicle history report on a used car before you buy it. Both will tell you whether the item is a lemon.