KEEPING CURRENT PROPERTY CASES BONA FIDE PURCHASE: Foreclosure buyer paying low price is not bona fide purchaser when owner lacks notice of sale. After the Georges failed to pay $205 in assessments on their North Carolina home, the homeowners’ association filed a claim of lien and initiated foreclosure proceedings. The homeowners’ association did not serve the Georges personally or by mail at their official residence in the Virgin Islands but personally served a person at the home who represented herself to be Mrs. George but turned out to be the Georges’ daughter. The foreclosure buyer purchased the property for $2,650 and soon resold it to a company that planned to spend $50,000 in renovations and market the property for $240,000. The Georges successfully moved to set aside all proceedings due to a lack of notice of the unpaid fees or foreclosure proceedings. The trial court declared all deeds and transactions null and void. The buyers appealed, claiming they were good faith purchasers for value. The intermediate appellate court held that the trustee failed properly to serve the Georges because the home in question was not their usual place of abode but found the buyers were good faith purchasers for value based on “constitutionally sufficient notice,” given the multiple attempts to notify the Georges of the pendency of foreclosure proceedings. The supreme court reversed. A good faith purchaser for value must purchase “without notice, actual or constructive, of any infirmity” and pay “valuable consideration.” N.C. Gen. Stat. § 1-108. Although mere Keeping Current—Property Editor: Prof. Shelby D. Green, Elisabeth Haub School of Law at Pace University, White Plains, NY 10603, sgreen@law.pace.edu. Contributor: Prof. Darryl C. Wilson.
Keeping Current—Property offers a look at selected recent cases, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.
inadequacy of purchase price alone is not sufficient to upset a sale, there was more here that should have prompted the buyers to question the sale—the deed under which the Georges took title showed they resided in the Virgin Islands, the affidavit of service revealed several unsuccessful attempts at service in the Virgin Islands, the only service was at the property, and the Georges paid over $100,000 for the property, which was free and clear of all liens other than the $205, making it unreasonable to assume that the Georges would knowingly allow the foreclosure to proceed without objection. The court set aside the transfers but remanded for a determination whether restitution was in order. In re George, 856 S.E.2d 483 (N.C. 2021). DEEDS: Unrecorded plat referred to in recorded deed creates easement appurtenant. RLC contracted to buy a one-acre parcel, Lot C, from 4N. The town approved and recorded a minor subdivision plan dated January 20, 2016, which included a metes and bounds description of the lot and showed access by a 40-foot-wide right of way named Nunes Lane. A second minor subdivision plan, dated January 5, 2016, was also prepared, and it contained the same metes and bounds description for lot C, but it was never approved by the town. The warranty deed from 4N to RLC incorporated by reference the January 5 plan, but not
the January 20 plan. After closing, RLC discovered it lacked access to the lot on account of a row of boulders placed at the entrance of the lane. RLC sued, seeking a declaration of a right of way and injunctive relief for the removal of the boulders. The trial court granted summary judgment to RLC, finding the warranty deed clearly and unambiguously granted an easement over Nunes Lane. The court declined to examine extrinsic evidence, including affidavits asserting that 4N told RLC that an easement over Nunes Lane would not be included in the sale and refused to consider the fact of the boulders in place as bearing on intent. The supreme court affirmed. Under well-established principles, when a property owner subdivides land and sells with reference to a subdivision plan, the purchaser of the lot is granted an easement in the roadways shown on the plan. The easement is appurtenant to the property and passes with the conveyance of the property unless specifically excluded, even though not mentioned in the deed. Here, the record reflects that Nunes Lane was platted in town plans since at least 2007 and the conveyance of Lot C was made with reference to the unrecorded January 5 plan. It was not relevant that the town failed to approve or record the January 5 plan. All that mattered was that in the plan, Nunes Lane was depicted as a lane that abutted Lot C. The plan confirmed a lane, not a wall of boulders. Read’s Landscape Constr., Inc. v. Town of West Warwick, 252 A.3d 713 (R.I. 2021). FORECLOSURE: Filing fee assessed against residential foreclosure plaintiffs violates free access clause of state constitution. An Illinois statute created state programs to provide nonlegal housing counseling for citizens and to maintain abandoned residences, funded by a $50 filing fee for all
Published in Probate & Property, Volume 35, No 6 © 2021 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
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November/December 2021
