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On February 19, Bisnow hosted its 2019 Pacific Northwest Hotel Summit held at the Four Seasons Hotel in Seattle. Reputed real estate property developers, hotelier and principal consultant of an architectural and design services firm convened to share their insights on how Seattle’s booming tourism is impacting the hotel industry, specifically with regard to the increase in development, investment, supply, and branding of hotel properties.

High rise buildings_US flagThe House Judiciary Committee held a hearing earlier this month to review the performance of the EB-5 Immigrant Investor Program. Congress created the EB-5 visa program in 1990 as a tool to stimulate the U.S. economy by encouraging foreign capital investments and job creation. The EB-5 program makes immigrant visas and subsequent “green cards” available to foreign nationals who invest at least $1 million in a new commercial enterprise that will create or preserve at least 10 full-time jobs in the U. S. A foreign national may invest only $500,000 if the investment is in a targeted employment area (“TEA”), defined to include certain rural areas and areas of high unemployment. A considerable amount of foreign capital invested through the EB-5 program has been invested in domestic real estate development projects.

Seattle condosThe Supreme Court of the State of Washington recently decided a case in which the advancing forces of the sharing economy intersect with the real estate world, in Fillmore LLLP the Unit Owners Association of Centre Pointe Condominium, Washington Supreme Court No. 0879-6 (September 3, 2015). In this case, the court analyzed whether a homeowners’ association condominium declaration amendment required a 67% percent vote, or if the higher threshold of 90% percent of affirmative votes was required to pass a resolution restricting the right of a condominium owner to rent the condominium.

Historical Brick Wall.Innocent Property Owners may no longer be protected by federal legislation meant to toll the statute of limitations on an action against a late discovery of contaminated property.

In CTS Corporation v Peter Waldburger et al., 573 U.S. ____ (2014),  the United States Supreme Court ruled that state law may override federal legislation meant to protect a property owner when the discovery of environmental contamination is years after the release.

Congress enacted the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), including a provision that, by its terms, pre-empts statues of limitations applicable to state-law tort actions in certain circumstances with respect to an injury from a release of hazardous substances. Under these provisions, the statute of limitations begins to run on an action after the property owner or person discovers that the harm to their property or person was caused by contamination of a previous property owner or another person.

However, several states, including Oregon, Connecticut, Kansas, North Carolina, and Alabama, have statutes of repose that limit the time frame a property owner may bring a cause of action regardless of the date of discovery of the contamination or its source.

In North Carolina, homeowners challenged their state’s statute of repose that limited its ability to seek compensation for the release of hazardous substances 24 years before by an electronic manufacture that contaminated their property. The state’s statute of repose limited any cause of action to 10 years after the last culpable act, regardless of discovery of the contamination or its source.  The question presented to the United States Supreme Court was whether a federal statute on the timeliness of suits for harm caused by environmental contamination, 42 U. S.C. §9658, preempts North Carolina’s 10 year statute of repose provision.

In the ordinary course, a statute of limitations creates a time limit for suing in a civil case, based on the date when the claim accrued, and is often based on the date of discovery of the harm.  A statute of repose puts an outer limit on the right to bring a civil action, not from the date of discovery, but from the date of the last culpable act or omission of the defendant. In a 7 to 2 decision, the Supreme Court held that a statute of repose is not within the pre-emption mandate of the act, and that §9658 addressed statute of limitations by its express terms but that language did not include pre-emption of a state’s statute of repose. Thus, because the states are independent sovereigns, the police powers of the state are not superseded by the Federal Act, unless there is a clear manifest from Congress.

The Court reversed the Court of Appeals for the Fourth Circuit dismissing the homeowners’ state law claim for water contamination against the electronic manufacturer; 42 U.S.C. §9658 pre-empts only statutes of limitations and not statutes of repose.  The question now remains, will additional state legislatures adopt statutes of repose in light of this decision.

Cynthia M. Fraser is an owner at Garvey Schubert Barer in the firm’s Portland Oregon office.

Governor Inslee recently signed legislation passed by the Washington legislature which provides a mechanism for clearing up deeds of trust on title securing paid loans, without having to chase lenders.  This is good news for the real estate industry.

Have you ever paid off a debt secured by a deed of trust on real estate, and had to waste time and money chasing the lender to get the trustee to reconvey the lien?  It's a pain.  Sure, there's been a 60 day time limit, requiring lenders and their trustees to release deeds of trust securing satisfied debts.  If the deed of trust is not reconveyed within that time period, a lender is liable to the property owner for damages and attorney fees.  RCW 61.16.030; I'm happy to report that the Washington legislature has created another tool to clear up title without bringing a lawsuit.

Representatives Roger Goodman (D-Kirkland) and Terry Nealey (R-Walla Walla) sponsored the new legislation which allows a title insurance company or agent, a licensed escrow agent, or a Washington attorney (collectively, “Agent”), who has paid a lender’s pay off demand in full from escrow powers to bring about a reconveyance of the lien securing the satisfied debt.  Upon receipt of notice of the beneficiary's failure to request reconveyance, the Agent may submit proof of satisfaction of the debt and request the deed of trust trustee to reconvey the lien.  If the trustee on the deed of trust is unable or unwilling to reconvey within 120 days following payment to the beneficiary in response to the beneficiary's demand statement, then the agent may record a notarized "declaration of payment" in the land records of the county(ies) where the deed of trust was recorded, and send a copy to the beneficiary and trustee.

The beneficiary or trustee then have 60 days to object to the "declaration of payment" by filing an "objection to declaration of payment".   If no objection has been filed within 60 days, "any lien of the deed of trust against the real property encumbered must cease to exist".   Magic - clean title.

This is a good law.  Too often a lender is intensely interested in having its loan repaid, and then its attention to cleaning up the encumbered property is quickly distracted.  Who wants to have to bring a lawsuit to clear title of a deed of trust which has been repaid?  The costs and time involved are usually prohibitive. This new law, which will be codified at RCW 61.24.110 (2) and (3) provides an easy tool to do so.

Is there a downside?   There is a possibility of a dishonest title insurance company or agent, escrow agent or attorney filing a false "declaration of payment," and then failing to send notice to the beneficiary.   A subsequent examination of title in connection with a refinancing or sale would not consider the subject deed of trust to be valid, which could result in a secured loan not being repaid upon such event. The initial loss would fall on the title insurance company, insuring the new deed of trust and/or purchaser.

Ultimately, and hopefully, the guilty Agent filing the declaration of payment would be drawn and quartered, or at least be required to pay, and if the agent were a lawyer, severely disciplined.

More probably, less time will be wasted chasing down disorganized lenders to reconvey their liens. May it be so!

Please feel free to contact me if you have any questions!

In the day-to-day practice of law, we are often asked to sort out problems big and small with little opportunity to control who walks in our door. However, at Garvey Schubert Barer, the firm’s dedication to pro bono representation provides encouragement and support for its attorneys in giving a voice to those who cannot afford one. Ed Sullivan and I use our land use expertise on the Board of the Housing Land Advocates, an Oregon non-profit organization which has as its mission the support of land use policies that ensure land is available for affordable housing development in sustainable communities.

Logo of the Housing Land Advocates website

Recently, Housing Land Advocates Board Members, Ed Sullivan and Karin Power, published an article, entitled, "Coming Affordable Housing Challenges for Municipalities after the Great Recession." The article summarizes the challenges for cost-burdened renters in the current economy. The Great Recession’s effect on affordable housing in America was undeniably pervasive, and the statistical figures of cost-burdened rental households appear bleak when compared against the ongoing losses in rental housing stock. With fewer renters than ever supported through HUD assistance programs, however, municipalities simply cannot afford to take a back seat to the ramifications of additional housing unit loss, particularly as it appears that the number of rental households is poised for continued growth over the current decade. As this article details, municipalities can and should implement the limited and cost-efficient tools they have at their disposal to mitigate the impact of an increasingly competitive rental market on their low-income residents.

On February 8th, 2012 Garvey Shubert Barer is hosting an event titled "Real Estate for Planners: What Planners Should Know About Real Estate Issues."

The discussion will be followed by a wine and cheese reception.

To find out more about the event please view here.

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We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
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