October 31, 2011

Haunted Houses

Happy Halloween!
Happy Halloween, Howard County!

I just finished carving my pumpkin, and, in the spirit of the season, I thought I would share with you a little legal horror story, which I first heard in law school.

The case in question is Stambovsky v. Ackley, 169 A.D.2d 254 (NY App. Div. 1991). The facts of the case are thus:

Helen Ackley owned a home in Nyack, New York. She and her family had repeatedly reported the home as being haunted by poltergeists. Their tales of supernatural disturbances had appeared in the local newspaper an three occassions, as well as Reader's Digest. The home was also included on a walking tour of the city of Nyack as a haunted house.

A few years later, Ms. Ackley put her haunted house on the market with Ellis Realty. Jeffrey Stambovsky signed a contract to purchase the house, and made a down payment of $32,500 on the purchase price of $650,000. Mr. Stambovsky was not from Nyack and was unaware of the spooky character the home possessed. Needless to say, when he did hear of the otherworldly haunts who were told to roam the home, he wanted out of the contract. He did not attend the closing for the sale of the house, resulting in his forfeiting of the down payment.

Mr. Stambovsky sued Ms. Ackley for the return of the down payment. The New York Supreme Court (their trial court) dismissed his action, as New York followed the property law doctrine of caveat emptor - buyer beware - and said that the seller had no duty to inform a potential buyer of the alleged hauntings. Mr. Stambovsky appealed. The appellate court reversed the decision. The appellate court said that while caveat emptor would normally bar a recission action, in this case "the most meticulous inspection and the search would not reveal the presence of poltergeists at the premises or unearth the property's ghoulish reputation in the community". While the court did not say that it believed in ghosts, because Ackley had made the claim so well known the court ruled that the house was haunted as a matter of law.

The legal term for a haunted house is stigmatized property, as it is property which buyers or tenants may shun for reasons that are unrelated to its physical condition or features. A haunted house has a phenomena stigma, but not all jurisdictions recognize this as something that needs to be disclosed. Other types of stigma include criminal stigma (where the house was a brothel or drug den), murder/suicide stigma, public stigma (where the house is famous to many people and any reasonable person can be expected to know of it), and debt stigma (where the previous owners were hounded by debt collectors at the home).

We at Taylor Legal wish you a very happy and safe Halloween!

October 25, 2011

Banks Giving Away Foreclosures

Earlier in the week, the Washington Post reported that some banks are giving away foreclosed properties rather than trying to maintain and sell homes in blighted areas. The article highlighted the efforts in Cleveland to minimize the damage an abandoned home can do to an already depressed neighborhood. In Cleveland, the Cuyahoga County Land Reutilization Corporation receives properties from banks which donated under an Ohio law passed in 2009 designed to created county land reutilization corporations (LRCs) - which are being referred to as land banks.

Land banking is a traditional method of investing. A purchaser will acquire large tracts of undeveloped land and hold the property until the time it becomes profitable again. In Cleveland, however, the Cuyahoga County Land Reutilization Corporation operates a little differently. The group "is committed to the healthy, sustainable redevelopment of Cuyahoga County. The CCLRC will exhibit this ongoing commitment through efforts such as deconstruction, the appropriate and innovative re-use of vacant land, and the use of energy efficient, green rehabilitation and new construction standards."

October 18, 2011

Howard County Housing to Host “Mortgage Late? Don’t Wait!” a Foreclosure Prevention Event


Zoning and the Residential Business

Earlier in the month, Katherine Taylor posted to our blog an article from the Small Business Association (SBA) which highlighted some of the difficulties that residential – i.e. home based – businesses face. The SBA estimates that up to 50% of small businesses are run out of a person's home. With the increasing use of internet tools, such as video-conferencing and online faxing services, those with an entrepreneurial spirit can easily jump-start a company from their garage.  Additionally, with larger businesses employing furlough days and flex-time, traditional corporate work is being performed at home.

Having a home based businesses is not without it's challenges. Zoning laws for home based businesses are often very stringent. The SBA notes that zoning codes frequently prohibit signs, vehicles of certain classes, exterior improvements relating to the business, and outdoor storage. Additionally, zoning codes can limit the number of employees of a home based business and the number of visitors.

In Howard County, there are a few very specific zoning regulations (opens a .pdf) that a home based business should be aware of:

  • The home-based business can't occupy more than 33% of the gross floor area of the dwelling OR 800 square feet, whichever is less;
  • The business owner can't have clients visit in a detached garage;
  • There can be no exterior evidence of the business;
  • Only certain occupations are allowed to conduct home-based businesses.

While this is by no means a comprehensive list, it gives a general idea of the difficulties faced by a potential business owner seeking to establish their business out of their home. Some of the regulations are very sensible - let's face it, no one wants a semi-truck rolling up their street at three in the morning so the neighbor can get the latest shipment of widgets; however, in an economy that is not based on manufacturing but on intellectual products, home based businesses are likely to have little impact on the residential characteristics of the neighborhood.

For those looking to start a residential business, the SBA does have a great page on establishing a home based business.

October 9, 2011

Anne Arundel county zoning lawsuit


October 3, 2011

What is Eminent Domain?

Earlier this week, I posted a news article on Howard County tabling eminent domain. So, what is eminent domain? Black's Law Dictionary, 8th edition, defines eminent domain as "The inherent power of a government entity to take privately owned property, esp. land, and convert it to public use, subject to reasonable compensation for the taking." Black's quotes John E. Nowak and Ronald D. Rotunda's Constitutional Law :
The term 'eminent domain' is said to have originated with Grotius, the seventeenth century legal scholar. Grotius believed that the state possessed the power to take or destroy property for the benefit of the social unit, but he believed that when the state so acted, it was obligated to compensate the injured property owner for his losses. Blackstone, too, believed that society had no general power to take the private property of landowners, except on the payment of a reasonable price. The just compensation clause of the fifth amendment to the Constitution was built upon this concept of a moral obligation to pay for governmental interference with private property. (quoting Bauman v. Ross, 167 U.S. 548, 574, 17 S.Ct. 966, 976 (1897).