Articles Posted in Real Estate & Property Law

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The Supreme Court affirmed in part and reversed in part the order of the Court of Appeals reversing the trial court’s order addressing the appropriate measure of damages in this condemnation action. The North Carolina Department of Transportation (DOT) condemned a leasehold interest held by Adams Outdoor Advertising of Charlotte Limited Partnership (Adams). Adams owned a billboard situated on the leasehold and rented out space on the billboard. At the time of the taking the billboard did not conform to city or state regulations, but Adams possessed permits that allowed for the billboard’s continued use. The Supreme Court held (1) the fair market value provision of N.C. Gen. Stat. Article 9 governed this condemnation proceeding; (2) the value added by the billboard, the evidence of rental income derived from leasing advertising space on the billboard, and the value added to the leasehold interest by the permits issued to Adams may be considered in determining the fair market value of the leasehold interest; (3) an automatic ten-year extension of a lease may be considered in determining the fair market value, but options to renew the lease may not be; and (4) bonus value method evidence offered by DOT may not be considered in determining the fair market value of the leasehold interest. View "Department of Transportation v. Adams Outdoor Advertising of Charlotte Limited Partnership" on Justia Law

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Borrowers executed a promissory note to purchase real property. The debt was secured by a deed of trust on the underlying real property. Bank, the alleged holder of note and subject deed of trust, filed a complaint against Borrowers under the deed of trust, seeking judicial foreclosure and judgment on the note, alleging that Borrowers defaulted under the terms of the note by failing to make payments. Borrowers moved to dismiss for failure to state a claim, arguing that the evidence was insufficient to establish that Bank failed to establish its status as a holder of the note and therefore did not have the right to foreclose. The court of appeals affirmed. The Supreme Court reversed, holding that Plaintiff’s complaint adequately stated a cause of action for judicial foreclosure and that the court of appeals erred by applying the requirements applicable in non-judicial foreclosure by power of sale to Plaintiff’s judicial foreclosure action. View "U.S. Bank National Ass’n v. Pinkney" on Justia Law

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Borrowers executed a promissory note to purchase real property. The debt was secured by a deed of trust on the underlying real property. Bank, the alleged holder of note and subject deed of trust, filed a complaint against Borrowers under the deed of trust, seeking judicial foreclosure and judgment on the note, alleging that Borrowers defaulted under the terms of the note by failing to make payments. Borrowers moved to dismiss for failure to state a claim, arguing that the evidence was insufficient to establish that Bank failed to establish its status as a holder of the note and therefore did not have the right to foreclose. The court of appeals affirmed. The Supreme Court reversed, holding that Plaintiff’s complaint adequately stated a cause of action for judicial foreclosure and that the court of appeals erred by applying the requirements applicable in non-judicial foreclosure by power of sale to Plaintiff’s judicial foreclosure action. View "U.S. Bank National Ass’n v. Pinkney" on Justia Law

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In this case concerning borrowers’ invocation of North Carolina’s anti-deficiency statute, the Supreme Court held that Defendants failed to forecast substantial competent evidence sufficient to create a genuine issue of material fact regarding the “true value” of the foreclosed property at issue under N.C. Gen. Stat.45-21.36. Defendants asserted the protection of the anti-deficiency statute after a Bank foreclosed the property by nonjudicial power of sale under a deed of trust, purchased the property, and then filed this action to collect the deficiency. The trial court granted summary judgment for the Bank. The Court of Appeals reversed. The Supreme Court reinstated the trial court’s grant of summary judgment, ruling that merely reciting the statutory language or asserting an unsubstantiated opinion regarding a foreclosed property’s value is insufficient under N.C. R. Civ. P. 56. View "United Community Bank (Georgia) v. Wolfe" on Justia Law

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Duke Energy Carolinas, LLC (Duke) owned an easement in Huntersville, North Carolina allowing construction of and access to its power lines. A portion of Herbert Gray’s property encroached on Duke’s right-of-way. Duke asked Gray to remove the encroachment. When Gray did not reply, Duke filed suit seeking injunctive and other relief. The trial court concluded that the six-year statute of limitations for an injury to an incorporeal hereditament set out in N.C. Gen. Stat. 1-50(a)(3) had run and that, consequently, Duke had no legal remedy. The court of appeal affirmed. The Supreme Court reversed, holding (1) removal of the encroachment is a recovery of real property lying outside the scope of section 1-50(a)(3); and (2) therefore, this action fell within the twenty-year statute of limitations set out in N.C. Gen. Stat. 1-40. Remanded. View "Duke Energy Carolinas, LLC v. Gray" on Justia Law

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Plaintiffs were individual investors in undeveloped real estate that purchased real property shortly before the collapse of the real estate market. In 2010, Plaintiffs commenced this action seeking to recover against a bank and its appraisers for their alleged participation in a scheme to defraud investors by artificially inflating property values. Specifically, Plaintiffs alleged that they would not have purchased the real property but for faulty appraisal information and that the bank should have disclosed the inflating appraised property values to them. The trial court granted Defendants’ motion to dismiss on the basis that Plaintiffs did not receive the appraisals at the time of their decisions to purchase. The Supreme Court affirmed, holding that because it was undisputed that Plaintiffs decided to purchase the investment properties without consulting an appraisal and obligated themselves to purchase the properties independent of the loan process, Defendants were entitled to dismissal of all claims. View "Arnesen v. Rivers Edge Golf Club & Plantation, Inc." on Justia Law

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Landowner sought to develop a townhouse community on residential property and obtained a zoning permit to develop the townhouses. Petitioner appealed the Zoning Officer’s formal determination to the Warren County Board of Adjustment. The Board overturned the Zoning Officer’s decision and revoked the zoning permit issued to Landowner. Landowner and Warren County subsequently entered into a consent order agreeing that the zoning permit would be reinstated. A Zoning Officer then issued a determination that the subject property was not restricted by Warren County Zoning Ordinances. Petitioner appealed the Zoning Officer’s determination. The Zoning Officer, however, did not place Petitioner’s appeal on the Board’s agenda. Petitioner filed a petition for writ of mandamus in superior court, requesting that the court compel Respondents to place his appeal on the Board’s next available agenda for a hearing. The court granted the petition. The Court of Appeals affirmed, concluding that the Zoning Officer had a mandatory statutory duty to transmit Petitioner’s appeal to the Board and the Petitioner had a right to have its appeal placed on the Board’s agenda. The Supreme Court affirmed, holding that a zoning officer may not refuse to transmit an appeal from his own zoning determining to the county board of adjustment for its review. View "Morningstar Marinas/Eaton Ferry, LLC v. Warren County" on Justia Law

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A Bank issued two loans to an LLC guaranteed by two Guarantors. After the LLC defaulted, the Bank sued the LLC and the Guarantors for the outstanding indebtedness. Plaintiff then sold the properties at a foreclosure proceeding at which it was the sole bidder. Plaintiff subsequently dismissed all claims against the Bank. The Guarantors moved to join the LLC as a defendant in the action. The trial court entered an order ruling that joinder of the LLC was appropriate. The court then entered summary judgment against the Guarantors on the issue of their liability for payment of the deficiency. The LLC and the Guarantors then amended their answers to assert the anti-deficiency defense set forth in N.C. Gen. Stat. 45-21.36. After a trial, the court reduced the Guarantors’ liability pursuant to section 45-21.36, concluding that once the LLC was joined as a party, the Guarantors were entitled to benefit from the LLC’s use of section 45-21.36. The Court of Appeals affirmed. The Supreme Court affirmed, holding (1) the LLC was properly joined in this case; and (2) irrespective of the LLC’s presence in the litigation, the non-mortgagor Guarantors were entitled to raise the anti-deficiency defense. View "High Point Bank & Trust Co. v. Highmark Props., LLC" on Justia Law

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Defendant’s predecessor in title ("Wayne") owned two tracts of land (“Wayne Tracts”). Park Creek, LLC held adjacent land. Under a pre-approved plan, Wayne and the LLC began constructing a development plan for a residential subdivision using land owned by both Wayne and the LLC. When Wayne conveyed his property to Defendant, his revocable trust of which he was the trustee, future phases of the subdivision remained undeveloped. The Town of Midland later filed two condemnation actions against Defendant condemning three acres of Defendant’s property necessary for an easement. The trial court determined that no unity of ownership existed as to the contiguous tracts of land owned by Defendant and Park Creek, LLC. The Court of Appeals affirmed the trial court’s conclusion that no unity of ownership existed between the Wayne Tracts and the LLC Tract for the purpose of determining compensation. The Supreme Court reversed in part, holding that, where Defendant and the LLC had a vested right to complete the subdivision pursuant to the pre-approved plan, unity of ownership existed between the adjacent properties. View "Town of Midland v. Wayne" on Justia Law

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In building their home, Plaintiffs purchased SuperFlex, a stucco-like material, to cover the house’s exterior. GrailCoat Worldwide, LLC and GrailCo, Inc. (collectively, GrailCoat), the manufacturers of SuperFlex, provided an express twenty-year warranty for the product. Several years after the construction of their home was completed, the product failed. Plaintiffs brought suit against GrailCoat and Hartley Construction, Inc., the company that had designed and built the home, for damages. Hartley moved for summary judgment under N.C. Gen. Stat. 1-50(a)(5), North Carolina’s six-year statute of repose for claims arising out of improvements to real property. The trial court granted summary judgment for Defendants. The Supreme Court reversed the trial court’s dismissal of Plaintiffs’ claim for breach of express warranty against GrailCoat, holding that GrailCoat knowingly and freely entered into a valid contract of sale with Plaintiffs that provided for a warranty term that exceeded the repose period, and therefore, GrailCoat waived the protections provided by the statute of repose. View "Christie v. Hartley Constr., Inc." on Justia Law