deed restrictions | Title Nerds

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Title Nerds co-hosts Mike O’Donnell and Bethany Abele welcomed two partners from our Environmental Practice In Episode 9, Alexa Richman-La Londe and Steve Senior. Alexa and Steve discussed the hot real estate market in New Jersey for commercial/industrial properties, which are frequently environmentally impaired and require remediation. This led to an interesting conversation about the use and mechanics of NJDEP’s Deed Notices that get recorded in land records, including a case where a property owner refused to consent to a Deed Notice (Cozzoli Machine Company v. Crown Real Estate Holdings, Inc., Docket No. A-1733-19, App. Div., Dec. 7, 2021). The discussion led into other environmental documents that show up in title searches (including, other deed restrictions, conservation easements and liens), and the potential obligations of sellers and/or lenders to disclose environmental reports.

Next, Mike interviewed counsel Jorge Sanchez about a case recently heard in the Appellate Division and approved for publication, Woodmont Props. v. Twp. of Westampton, 2022 N.J. Super. LEXIS 13, *2 (N.J. App. Div. Feb. 7, 2022). In this published case, the appeals court affirmed the dismissal of a potential purchaser’s claim for a constructive trust as to foreclosed land, finding that the potential purchaser’s claim could not be sustained because a foreclosure and sheriff’s sale extinguished any unrecorded contractual right to purchase the property. The plaintiff, Woodmont had contracted to purchase a piece of land. The contract required that the seller not encumber the Property more than 80% of its value. Woodmont did not record the contract in the County Clerk’s Office. The following week, the seller gave a mortgage on the land to TD Bank to secure a loan, encumbering the property. The seller defaulted on the loan prior to closing with Woodmont, and TD Bank sought foreclosure of the property. Woodmont did not intervene. While the foreclosure was pending, Woodmont entered into a redevelopment agreement with the Township of Westampton, which was terminated by Westampton when Woodmont failed to secure title to the land. The property was eventually sold to TD Bank at a Sheriff’s Sale. Woodmont subsequently filed suit against Westampton and TD Bank, among others, alleging tortious interference and a breach of the redevelopment agreement. Central to the claim was that the TD mortgage lien was more than 80% of the property’s value. The case was dismissed, and Woodmont appealed. On appeal, the appeals court found that the claims against Westampton failed because the redevelopment agreement was conditioned on Woodmont having title to the property, which it did not. As to TD Bank, the Court first found that even if TD Bank knew of the Woodmount contract, it still had a right to foreclose and need not name Woodmont as the contract was not recorded. To rule otherwise would run contrary to N.J.S.A. 2A:50-30, prior case law. The Court warned that those who did not record their interests ran the risk of their property interest being terminated without being named as defendants in a foreclosure. However, the court did find that Woodmont could have a viable claim against TD Bank for tortiously interfering with its contractual rights with the seller if it indeed knew of the contract .

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Episode 7 features one of Riker Danzig’s impressive retired judges, the Hon. Travis Francis, who was Assignment Judge for Middlesex County, Superior Court of New Jersey before joining Riker Danzig. Judge Francis is now an active mediator and discovery master in the Firm’s Alternative Dispute Resolution Practice. Co-Host Bethany Abele interviews Judge Francis about some of the intriguing title insurance and real estate cases that came before him when he was on the bench, including issues of quiet title, specific performance and adverse possession. Co-Host Michael O’Donnell joins Bethany and Judge Francis in the discussion, which headed “into the weeds,” literally, as cases involving farmers and fences kept “cropping” up. Keeping us on track, Judge Francis provides insights and best practices for counsel bringing title insurance cases, including guidance on pursuing orders to show cause and motions for relief to provide for a good experience with the deciding judge.

Next, Mike invites Riker Danzig attorney Kevin Hakansson to unpack the Cherry v. Ziad Hadaya case, 2021 N.J. Super. Unpub. LEXIS 2571 (App. Div. Oct. 29, 2021), in which the NJ Appellate Division held that neighbors could enforce deed restrictions tracing back to a 1928 deed to prevent another neighbor from subdividing their property. In Cherry, Defendants owned a plot of land on Jefferson Road in Princeton that was originally part of a larger parcel conveyed in 1928. While the 1928 deed contained restrictions on the land regarding subdivision, the 2004 deed did not. After the defendants received approval from the Planning Board in 2008 to subdivide its property into two lots, and later applied to subdivide the larger resulting lot into two more lots, the plaintiffs, who owned neighboring properties, filed a complaint seeking to void the 2008 subdivision and to enjoin further subdivision based on the 1928 deed restrictions relating primarily to the frontage of the lots. The Chancery Court dismissed some neighbors’ claims for lack of standing as they were not in the chain of title of the 1928 deed. But it granted summary judgment for the other plaintiffs whose properties were within the 1928 deed chain of title and ordered the Defendants to re-convey the plots back to their 2004 dimensions. On appeal, the Appellate Division affirmed, agreeing that enforcement of the 1928 deed restrictions was reasonable, and that plaintiffs in the chain of title were among those intended to be incorporated into the neighborhood scheme.

Title Nerds

A Title Insurance Podcast by Riker Danzig

Tag Archives: deed restrictions

Season 1, Episode 9

Season 1, Episode 7