Lien Sales – The Times Just Changed.

In October, 2014, the Maryland Court of Special Appeals issued a decision concerning Maryland’s lien and recovery business.  Lien and recovery companies are hired by mechanics and marinas to collect overdue charges for repairs and storage on vehicles and boats. At least as long as I have been practicing, lien companies have added a “processing fee” to the amount owed, and required that the boat or vehicle owner pay the processing fee in addition to the overdue charges in order to get their boat or vehicle back.  If the owner didn’t pay up, then the vehicles were put up for auction.  In Allstate Lien and Recovery Corp. v. Stansbury, however, the vehicle owner fought back.  Mr. Stansbury asserted that including a $1000 processing fee in the amount required to redeem the vehicle was an unfair and deceptive practice, and violated Maryland’s laws against unfair debt collection.  The trial court, and now the Court of Special Appeals, agreed that the inclusion of the processing fee was a violation of the Consumer Protection Act and the Consumer Debt Collection Act.

Violations of the Consumer Protection Act and Consumer Debt Collection Act both have significant consequences.  Consumer Protection Act violations are grounds for shifting attorneys’ fees from the consumer to the business — which means that Allstate Lien and Recovery in this case is likely to be responsible for tens of thousands of dollars (even hundreds of thousands) of fees for Mr. Stansbury’s lawyers.  A violation of Consumer Debt Collection allows for “damages of emotional distress and mental anguish suffered with or without accompanying injury.”  This means that a jury is free to award money for distress and upset, even without any kind of physical symptoms, if the debt collector has acted badly.  Since the lien and recovery company is the agent of the mechanic or marina — those businesses may also be on the hook if the lien and recovery company acts badly.

You are warned.  The unlawful $1000 processing fee may be costing Allstate Lien and Recovery (or hopefully their insurer) hundreds of thousands of dollars beyond what they paid their own attorneys to defend the case.

With those warnings, when does a garageman’s lien attach?  Here is the statute:

 

(a)(1) Any person who, with the consent of the owner, has custody of an aircraft and who, at the request of the owner, provides a service to or materials for the aircraft, has a lien on the aircraft for any charge incurred for any:

(i) Inspection, maintenance, repair, servicing, or rebuilding;

(ii) Storage, parking, handling, or tiedown; or

(iii) Parts, accessories, materials, or supplies.

(2) The operator of any airport on which an aircraft lands or which is otherwise used by an aircraft has a lien on the aircraft for any landing fee, flight fee, or other charge so incurred.

(3) A lien is created under this subsection when any charges giving rise to the lien are incurred.

(b)(1) Any person who, with the consent of the owner, has custody of a boat and who, at the request of the owner, provides a service to or materials for the boat, has a lien on the boat for any charge incurred for any:

(i) Repair, rebuilding, maintenance, servicing, or wet or dry wharfage;

(ii) Storage; or

(iii) Parts or accessories.

(2) A lien is created under this subsection when any charges giving rise to the lien are incurred.

(c)(1) Any person who, with the consent of the owner, has custody of a motor vehicle and who, at the request of the owner, provides a service to or materials for the motor vehicle, has a lien on the motor vehicle for any charge incurred for any:

(i) Repair or rebuilding;

(ii) Storage; or

(iii) Tires or other parts or accessories.

(2) A lien is created under this subsection when any charges set out under paragraph (1) of this subsection giving rise to the lien are incurred.

(d)(1) A park owner has a lien against a resident’s mobile home, if the park owner obtains a judgment against the resident under Title 8A, Subtitle 17 of the Real Property Article, and the resident fails to yield and render possession of the premises as ordered by the court.

(2) A lien under this subtitle shall be:

(i) Stayed if the resident files an appeal in accordance with Title 8A, Subtitle 17 of the Real Property Article; and

(ii) Extinguished if the resident redeems the premises in accordance with Title 8A, Subtitle 17 of the Real Property Article.

(3) A lien is created under this subsection when the resident fails to yield and render possession of the premises as ordered by the court.

Md. Code Ann., Com. Law § 16-202 (2014).

If you are owed money for repairs, storage or maintenance, here are the steps you should follow:

  1. retain possession unless and until paid in full;
  2. act promptly to hire a competent lawyer or lien sale company to prepare the statutory notices of lien.
  3. Accept payment in full — don’t add in charges that cannot be substantiated.

Baylaw, LLC can prepare statutory notices for a reasonable flat fee and walk you through the process of getting paid or obtaining title.  Please email Dirk Schwenk dschwenk@baylawllc.com, or Jeff Toppe jtoppe@baylawllc.com for details.

 

Contracts to Purchase or Sell Real Estate

For most people, if they encounter a real estate contract, it will be a prefabricated agreement presented by a real estate agent.  It may seem as if it is a final document, created by experts, and protecting your interests.  To a degree it will, but it is also there to protect the brokers and the other party, and many of its terms can be negotiated.  Remember that brokers and agents are typically paid out of the proceeds of the deal.  This means that they they have a strong incentive to get you to go through with the deal, even if it may not be in your best interest.  If you grow concerned — get a knowledgeable lawyer — the fees will be much cheaper than making a mistake.   This article is broken up into three sections: 1) Basic requirements for a contract; 2) disclosure considerations; and 3) investigation that is worthwhile to do when entering into a real estate contract.

Maryland Real Estate Contracts — basic requirements: 

There are only a few required elements to a real estate contract — most of the rest is filler required by statute and terms that help the brokers to enforce their right to receive a fee (and to protect themselves in the event of future litigation).

1. A writing, signed by the parties, that identifies the property and the basic terms of the contract:

In Maryland, as in most states, there is no enforceable contract to transfer land unless there is at least a written document identifying the property and the nature of the contract and signed by the seller.  The relevant code states no “interest in land may be assigned, granted, or surrendered, unless it is in writing signed by the party assigning, granting, or surrendering it, or his agent lawfully authorized by writing, or by act and operation of law.  Md. Code Ann., Real Prop. § 5-103.

2. Statutory Disclosures

There are a long list of disclosures that are required to be placed in Maryland real estate contracts by statute.  These include everything from the application of the Critical Areas laws, to notices about where deposits are placed by the broker, to sections on the homeowners associations, to land that cannot be used for residential purposes.  (See Maryland Real Property Article Section 14-117).  It should be noted, however, that failure to include those provisions does not render the contract void — it just means that a seller can sued for the failure to disclose, if the failure causes damages.  “Unless specifically provided, a contract for sale is not rendered invalid by the omission of any statement referred to in this section.”

3. A Deed

After a contract is reached, a deed is required to be filed in order to complete the transfer of property.  A deed is a somewhat more technical instrument, but its basic requirements are a sufficiently specific description of the property, identifications of seller and buyer, and it has the seller’s signature, property witnessed.  To be effective against someone else trying to claim ownership, it must be filed and indexed in the land records.

Maryland Real Estate Contracts — Thinking About Your Contract:

Aside from the boilerplate in a contract, there some things you should pay close attention to:

1. Special Disclosures:  As a purchaser, you can request specific disclosures from the seller – here are some you may want to consider:

a. Mold, mildew, flooding.  If there is any one thing that can ruin a house, its water damage, mold and mildew.  You definitely want to carefully look for any sign of water damage, including the kind of painting and repairs that might indicate past damage.  You can — and if there is any doubt you should — specifically request that the sellers disclose in writing any past water damage, mold, mildew or repairs.

b. Past litigation.  If there has been a past case concerning the house, such as against a homeowners association or neighbor, you probably want to know what that case was about.

c. Any unpermitted additions or structures.  If there is anything on the property that was not permitted, you want to know about it before you purchase not after — it can be very difficult to remedy such a situation.

2. Deadlines and Conditions.  If the contract is conditional (say on disclosure of water damage), and that condition is not fulfilled, then be sure to know exactly how and when to rescind the offer.

3. How much is the broker being paid?  If you are a seller, this item is negotiable, and it is a zero sum game.  Any money that your broker gets, is money out of your pocket.

4. “Other”:  Many contracts contain a blank term for special agreements — this often turns out to be the most important term in the deal.  Is there a boat that is supposed to transfer?  Is there a plan to lease the house back to the seller for a period after closing?  These things need to be written down clearly if they are going to be enforceable.

5. Homeowners Associations, Condo Associations and Improvement Associations.  If you are buying property in a subdivision, you definitely want to know what the covenants are and how they are enforced in the community.  This information should be available as part of the mandatory disclosures — READ IT!  You don’t want any surprises.  If it is not given to you, it should be on file in the land records of the County — find it or have your attorney get it for you.

Maryland Real Estate Contracts — Investigation Before Contract

Any contract requires a certain amount of trust with the other party — here are some things that are relatively easy to find, and very important to know:

1. Is the other party going to run to Court?  Most people never end up in trial – they never sue their neighbors – they just go about their business and pay their bills.  Some people are not like that — they always end up suing (or being sued by) the people that they deal with.  If someone makes you an offer on your house (or you make an offer on their house) take a few minutes to find out whether the other party is a repeat litigator — if they are, there had better be a good explanation or the hassle may take away from the joy of the transaction.

2. Are there proper permits?  Go to the planning department in the County where the property is — ask whether there are any issues with the property.  They can help.  You do not want to buy a house based on an addition that will need to be torn down.

3. Is there a bad neighbor?  Few circumstances are worse than buying a house only to find that you live in fear of your neighbor.  Many bad neighbor situations are the result of a dispute about the true boundaries — a survey can help you determine if there any encroachments either way.

4. What is the neighborhood/house/street really like?  Go to the property without the agent.  Walk along the street at night.  Is it what you want?  If not, move on.

Good luck!

J. Dirk Schwenk is a Maryland Real Estate, Waterfront Property, Civil Litigation and Maritime attorney from Annapolis, Maryland.  He provides civil litigation services in contract disputes, environmental and zoning issues, adverse possession and boundary disputes.  He does real estate law, including preparing and filing deeds.  He graduated cum laude (with honors) from the University of Maryland School of Law and has been in private practice in Maryland ever since.

 

 

 

Real Estate Law, Riparian Rights and the View

Waterfront Property and the Elephant In the Room: What About the View?

Imagine a waterfront house with a large privacy fence that blocks all view of the water — its a strange image.  If there is no view, the property loses most of its “waterfront” essence and most of its value, so somehow, somewhere, the law must protect a waterfront owner’s view.  But I regularly hear other attorneys and government officials recite the old saw: “there is no right to a view.”  They are wrong in some ways, but they do have good reason to say that.  Maryland law (and the law in most coastal states) is silent about the water view.  Concerning riparian rights, Maryland’s court says:

The term “riparian rights” indicates a bundle of rights that turn on the physical relationship of a body of water to the land abutting it….  This bundle includes at least the following rights: (i) of access to the water; (ii) to build a wharf or pier into the water; (iii) to use the water without transforming it; (iv) to consume the water; (v) to accretions (alluvium); and (vi) to own the subsoil of nonnavigable streams and other “private” waters. To be sure, access to the water is a primary asset of riparian rights.  Gunby v. Olde Severna Park Improvement Ass’n, Inc., 174 Md. App. 189, 239-40, 921 A.2d 292, 322 aff’d, 402 Md. 317, 936 A.2d 365 (2007).

The view wasn’t an issue in the Gunby case, but this is an accurate summary.  Florida law, for example is much different: “Upland owners hold several special or exclusive common law littoral rights: (1) the right to have access to the water; (2) the right to reasonably use the water; (3) the right to accretion and reliction; and (4) the right to the unobstructed view of the water.” Walton Cnty. v. Stop Beach Renourishment, Inc., 998 So. 2d 1102, 1111 (Fla. 2008).

Are Maryland property owners without protection then?  The answer is no, the view is protected, but getting to that can be a bit convoluted.  First and foremost, “access to water is a primary asset of riparian rights.”  Most things that obscure the view, such as a fence or wall or, to a lesser degree plantings, also obstruct access and therefore can and should be challenged.   (Need more on potential issues and solutions for waterfront purchases?  Look here.

A pier typically obscures the view and water access to a lesser degree than a fence — but it seems clear that someone else should not be able to build one in front of a lot owned by someone else.  This brings up the riparian owners’ right “to build a wharf or pier into the water.”  When it comes to someone else other than the owner putting in a pier, this is what I consider a negative right.  If the riparian owner as the affirmative right to build a pier, it follows that they also have the negative right to prevent a non-owner from building a pier.  This right is also captured in the Maryland Code (and most County and City zoning provisions) insofar as it is only the owner that has the right to build a pier in front of waterfront property.  The owner “may make improvements into the water in front of the land to preserve that person’s access to the navigable water …. After an improvement has been constructed, the improvement is the property of the owner of the land to which the improvement is attached.” Md. Code Ann., Envir. § 16-201.

And so, there are ways to protect a riparian owner’s view of the water, even if that right is not specifically laid out in Maryland’s cases or statutes.   If you are not an owner, however, the options to protect a view are drastically more limited — that will need to be a topic for another article.

If you are in a situation where you are concerned about a neighbor infringing on your view — send me an email at dschwenk@baylawllc.com or give me a call at the number to the right.

J. Dirk Schwenk is a Maryland Real Estate, Waterfront Property, Civil Litigation and Maritime Lawyer from Annapolis, Maryland.  He provides civil litigation services in contract disputes, environmental and zoning issues, adverse possession and boundary disputes.  He graduated cum laude (with honors) from the University of Maryland School of Law and has been in private practice in Maryland ever since.

 

 

The End is Near — Settlement and Dispute Resolution

As a lawyer it sometimes feels as though you work and work but nothing is ever fully resolved.  This month has been different for me – I have actually put the final signatures on settlements of four different kinds of cases — all central to the kind of work that I do.  The cases included:

1. a dispute on the location of a boundary as it pertained to riparian rights and a pier location;

2. a dispute on insurance coverage on damages to a boat;

3. a dispute between a purchaser and broker on a boat purchase; and

4. a dispute over erosion control efforts on community property.

Resolution of a case is always a team effort that includes dedicated clients that are willing to do the hard work of obtaining facts and facing the risk that a case does not go their way.  Patience and appropriate strategy a must.  If the opportunity presents itself to obtain results through negotiation and settlement, the entire team must have a clear idea of the achievable goals and be ready to compromise as needed.

Dispute on Boundaries, Riparian Rights and Pier Location

In Calvert County, Maryland, our client owned a property with a house at the end of a street in an incorporated town.  When the town was designed, his lots did not reach the water and the town owned a strip of land which included the entire waterfront.  Over time, however, erosion ate through the land between his property in the water, so that some lots in the subdivision were entirely submerged, and my client had a small cove that provided access to the bay.  The town took ownership of the submerged lots and a small remaining parcel that was still above water, leading my clients to worry that the town intended to put a walkway around his property which would isolate his property from the bay and decrease his privacy.

We filed a declaratory judgment action stating that he had obtained riparian rights when the water reached his property and asserting adverse possession over the land next to his lot.  After discussions with the Town stemming from the suit, it came to light that the town was willing to forego putting in a walkway if it could get an easement along the water to install a flood control berm.  Although the negotiations were difficult, we eventually reached an agreement that allowed for my client to have a location that allowed him to install a pier for access to the Chesapeake Bay; maintained my client’s privacy; and met the town’s needs for installation of flood control.

Dispute on Insurance Coverage on Boat Insurance

In Anne Arundel County, Maryland, we had a client whose boat had water enter into the core of his boat hull and eventually cause rot and damage.  When the boat was on jackstands at the marina, the hull partially crushed and required significant fiberglass and core repairs.  The client filed a claim under his hull insurance policy but surveys were inconclusive as to how the water entered the hull.  We filed suit asserting coverage under the all-risks policy of marine insurance, arguing that if the source of the water was not known, then none of the exclusions to the policy supported the denial of coverage.  We were unable to resolve the dispute through discussions with the adjuster, so we filed suit seeking a declaration of coverage.  Resolution was difficult and lengthy, but the client obtained money for repairs that he would not have had if he accepted the denial of coverage.

Dispute on failed erosion control project

Controlling erosion is a major issue for waterfront owners and waterfront communities, and the quality of contractors and erosion control projects is highly variable.  With new requirements preventing bulkheads and restricting hard shorelines, poor work can increase erosion or worse, leave large loose stones that can injure or even kill unsuspecting community members.  We recently obtained an insurance settlement to allow for reconstruction of a failed erosion control project on community land — the project was so bad that it required installation of “keep off” signs on the community’s main beach area as well as environmental citations against the contractor and a community board member.  Resolution required changing the way that the community’s erosion control funds were managed and contracts awarded, as well identifying appropriate experts to testify on the deficits with the project.  The Court’s intervention was required to determine significant related issues about the nature of the community’s land and covenants as well.  Perseverance was required — luckily it was a community that had leaders and community members that were willing to carry through with a difficult job to the end.

Dispute with Buyer and Broker in Boat Purchase Contract

One of the most interesting aspects of boat purchase/boat broker and boat tax cases is that they often involve many different states.  This case was no different.  The contract called for arbitration in New Jersey, where my client was located.  The boat was located and seat rialed in Tennessee.  The listing broker broker was in Alabama and the buyer was located (and the boat was delivered to) Illinois.  The buyer alleged that there were undisclosed problems with the boat and filed suit in Illinois (where he signed the contract).  Right away, the case involved the tension between arbitration and litigation; maritime and State common law; and the substantive law of multiple states — and all of that before getting to the question of whether the purchase contract’s terms protected my broker-client.  My client’s first questions to me concerned whether I was comfortable working across so many jurisdictional lines and areas of law.  Luckily those issues come up in most significant boat purchase disputes, and I had an idea of how to mitigate the issues of the Plaintiff having filed in Illinois.

This was a rare case in which there was an intense week of work preparing motions to dismiss or stay the action in Illinois.  We argued that the contract called for Arbitration in New Jersey, and that therefore the suit in Illinois could not go forward there.  Since there was some question about whether the arbitration clause would be enforced, we also argued that since boat was delivered to the purchaser in Tennessee, that was the appropriate State if the case was not going to be in New Jersey.  Ultimately we were able to reach a rapid resolution prior to the Court ruling on the motions.

Riparian Rights and Oyster Aquaculture

“No one can so use the navigable waters in front of the riparian owner’s property as to interfere with his rights, and when the owner wants to make improvements he can do so, even if they absolutely destroy any structure or other thing in the way of the improvements not there by the consent of the owner of the shore.”

This was the holding of Hodson v. Nelson, a decision of the Court of Appeals of Maryland in January 1914, almost exactly 100 years ago as I write.   In the case, Mr. Hodson was a riparian owner of land surrounding a cove in the Chesapeake Bay.  Mr. Nelson was a waterman operating a crab business in the cove, including erecting a “crab shanty” on piles not connected to the shore.  The riparian owner sought to prevent the waterman from maintaining structures in the cove, but was not directly impacted by the crab shanty, and did not have a pier in the cove.  Despite the strong language quoted above, the Court held that the landowner did not have the right to force the removal of the crab shanty.

In 1942, however, the Court of Appeals considered Culley v. Hollis, in which I riparian owner was built a pier that extended into an underwater oyster lease area.  The waterman filed suit to stop the pier, but the Court of Appeals confirmed the fact that the riparian owner was allowed to build a pier, and that an oyster lease on the bottoms could not prevent the construction.

With the tremendous loss of oysters and crabs in the Chesapeake over the past 100 years, the tension between riparian owners and watermen diminished greatly, and has not been the topic of an important decision in decades.  According to studies, the oyster population in the Chesapeake dropped to about 1% of historic levels by 1994, and has remained very low.  In 2009, Maryland began a significant initiative to increase oyster populations — this effort included the streamlining and expansion of oyster aquaculture in Maryland.  It should be no surprise that the expansion of oyster aquaculture has also created new tensions with riparian owners.

In recent months, I have represented two groups of landowners who were concerned about oyster leases being granted in front of their properties.  In one instance, the primary concern was oyster floats anchored just off their property.  The second involved oyster cages being placed in shallow water immediately in front of the groups’ properties and piers.

There are two types of oyster leases in Maryland.  There are “submerged land leases” which allow a waterman to put shell on the bottom and exclusively harvest the oysters.  There are also “water column leases” which allow the waterman to place floating baskets on the surface or cages on the bottom and grow oysters in that manner.  There are a variety of restrictions and limitations on where a lease can be located, including leases may not be within 50 feet of a shoreline or pier without permission; leases cannot be in a submerged aquatic vegetation protection zone; and they cannot be in a public oyster fishery (typically a natural bar).  My groups’ primary concern in both cases were with the water column leases, which placed equipment at or near the surface.

If you are faced with a lease being placed in front of your waterfront property, there are steps that you can take.  If the proposed lease meets the statutory requirements, the DNR is required to provide notice to owners of property that will be directly affected.  Riparian owners can file a petition with the Department of Natural Resources challenging the issuance of the lease.  In all likelihood, there will be efforts to reach a compromise, but if not, a hearing will be held before the Office of Administrative Hearings.  In that hearing, the DNR will present the case for the lease; the owners must be prepared to present concerns and arguments against it.

J. Dirk Schwenk is a Maryland Real Estate, Waterfront Property, Civil Litigation and Maritime Lawyer from Annapolis, Maryland.  He provides civil litigation services in contract disputes, environmental and zoning issues, adverse possession and boundary disputes.  He graduated cum laude (with honors) from the University of Maryland School of Law and has been in private practice in Maryland ever since.

Setbacks, Buffers and Variances

Setbacks, buffers and variances are some of the more confusing concepts in real estate law.  Both setbacks and buffers establish a distance from something (like a boundary line or a stream) and both setbacks and buffers limit development in the area.  In Maryland, setbacks and buffers are generally established by County or City ordinance.

In this simple diagram, the property owner cannot build next to the side lot lines because of setback restrictions, and cannot build near the water due to the required buffer zone.  The developable area, therefore, is that part of the lot that can be used without violating a setback or a buffer.

These restrictions would be fairly straightforward, except that a property owner can apply for a variance from the restrictions, which would allow him or her to build into the buffers and setbacks.  The word “variance” in this context basically means “waiver” – the property owner asks that zoning board waive the setback or buffer restrictions.

Under the Anne Arundel County Code, principal structures (houses) in residential areas must meet setbacks of 5 feet from the front lot line, 10 feet from the rear lot line and 7 feet from the side lot lines.  A setback can be granted under the following provision:

Anne Arundel County Code (2005) art.18 sec.16-305

Variances.

  (a)     Requirements for zoning variances. The Administrative Hearing Officer may vary or modify the provisions of this article when it is alleged that practical difficulties or unnecessary hardships prevent conformance with the strict letter of this article, provided the spirit of law is observed, public safety secured, and substantial justice done. A variance may be granted only if the Administrative Hearing Officer makes the following affirmative findings:

         (1)     Because of certain unique physical conditions, such as irregularity, narrowness or shallowness of lot size and shape or exceptional topographical conditions peculiar to and inherent in the particular lot, there is no reasonable possibility of developing the lot in strict conformance with this article; or

         (2)     Because of exceptional circumstances other than financial considerations, the grant of a variance is necessary to avoid practical difficulties or unnecessary hardship and to enable the applicant to develop the lot.

Assuming that there is something unusual about the lot dimensions or topography that makes development difficult, a variance is likely to be granted.  There are a second set of factors that the hearing officer will consider in determining the appropriate scope of the variance – the hearing officer must decide that (1) the variance is the minimum variance necessary to afford relief; (2) the granting of the variance will not: (i) alter the essential character of the neighborhood or district in which the lot is located; (ii) substantially impair the appropriate use or development of adjacent property; (iii) reduce forest cover in the limited development and resource conservation areas of the critical area; (iv) be contrary to acceptable clearing and replanting practices required for development in the critical area or a bog protection area; nor (v) be detrimental to the public welfare.

It is much more difficult to avoid, by variance, the impact of the critical areas buffer.  Critical area protections are established by state law, but its specifics are enacted by each locality in their zoning laws.  In Anne Arundel County, the basic buffers are established in 18-13-304 of the zoning code.

18-13-104.  Buffers, expanded buffers, and buffer modification areas.

  (a)   Buffer. There shall be a minimum 100-foot buffer landward from the mean high-water line of tidal waters, tributary streams, and tidal wetlands. Specific development criteria apply as set forth in Article 17 of this Code and COMAR.

  (b)   Expanded buffer. Except as provided in subsection (c), the 100-foot buffer shall be expanded beyond 100 feet to include contiguous sensitive areas, such as slopes of 15% or greater and hydric soils or highly erodible soils.

For waterfront lots, a 100 foot buffer can significantly diminish the buildable lot area, and the buffer can be expanded significantly if there are steep slopes, erodible soils or streams and wetlands.  At times, this can leave a lot with no area that can be developed without a variance.  A landowner can seek relief by obtaining a variance from the critical areas laws — variances can be granted if the following terms are met.

  (b)   Requirements for critical or bog protection area variances. For a property located in the critical area or a bog protection area, a variance to the requirements of the County’s critical area program or the bog protection program may be granted if the Administrative Hearing Officer makes the following affirmative findings:

     (1)   Because of certain unique physical conditions, such as exceptional topographical conditions peculiar to and inherent in the particular lot or irregularity, narrowness, or shallowness of lot size and shape, strict implementation of the County’s critical area program or bog protection program would result in an unwarranted hardship, as that term is defined in the Natural Resources Article, § 8-1808, of the State Code, to the applicant;

     (2)   (i)   A literal interpretation of COMAR, Title 27, Criteria for Local Critical Area Program Development or the County’s critical area program and related ordinances will deprive the applicant of rights commonly enjoyed by other properties in similar areas as permitted in accordance with the provisions of the critical area program within the critical area of the County; or

        (ii)   The County’s bog protection program will deprive the applicant of rights commonly enjoyed by other properties in similar areas within the bog protection area of the County;

     (3)   The granting of a variance will not confer on an applicant any special privilege that would be denied by COMAR, Title 27, the County’s critical area program to other lands or structures within the County critical area, or the County’s bog protection program to other lands or structures within a bog protection area;

     (4)   The variance request is not based on conditions or circumstances that are the result of actions by the applicant, including the commencement of development before an application for a variance was filed, and does not arise from any condition relating to land or building use on any neighboring property;

     (5)   The granting of a variance will not adversely affect water quality or adversely impact fish, wildlife, or plant habitat within the County’s critical area or a bog protection area and will be in harmony with the general spirit and intent of the County’s critical area program or bog protection program;

     (6)   The applicant for a variance to allow development in the 100-foot upland buffer has maximized the distance between the bog and each structure, taking into account natural features and the replacement of utilities, and has met the requirements of § 17-9-208 of this Code;

     (7)   The applicant, by competent and substantial evidence, has overcome the presumption contained in the Natural Resources Article, § 8-1808, of the State Code; and

     (8)   The applicant has evaluated and implemented site planning alternatives in accordance with § 18-16-201(c).

The critical area variance provisions require the developer to affirmatively show that there can be no reasonable building without a variance.  It also requires the developer to do sufficient planning and engineering to prove that the development will be no worse for development that fully forested buffer lands.  For better or worse, the real world effect of these provisions is that variances are only available to highly sophisticated and deep-pocketed applicants.  For those that are opposed to a development within the buffer, there are significant avenues that can be pursued — but in many cases effective opposition also requires significant engineering and legal expertise.

In conclusion — variances are exceptions to existing law that are available to a property owner if he or she has property that could not reasonably be developed without some sort of relief from the laws on the books.  Variances exist, at least in significant part, because the Supreme Court of the United States has determined that government cannot strip the value from real property by passing laws that prevent its reasonable use.  That sort of law is deemed a regulatory taking without compensation, and violates the United States Constitutional prohibition against the government taking citizen’s property without just compensation.

Maryland Adverse Possession

Adverse Possession, sometimes known as squatter’s rights, is the legal concept by which a person can come to own real estate by taking possession of it and holding it for a certain period of years.  In Maryland, the land must be held for a period of 20 years — many other states require shorter periods.  Under Maryland law, “to obtain title to property, the person claiming adverse possession must prove actual, open, notorious and visible, exclusive, hostile and continuous possession of the claimed property for at least 20 years.”  The classic case of adverse possession is, as between two neighbors, one fences in or builds on a part of the property that belongs to the other.  After 20 years, the property is deemed owned by the person that fenced it in or built on it.   The relationship between the parties may be friendly, but the acts of one must clearly against the legal interests of the other.

Most cases where adverse possession becomes an issue are far more complicated, however.   When trying to prove adverse possession, it is common that there have been multiple owners during the period and it can also be difficult to know who first built a structure or when it was built.   Many times a fence has been built, rebuilt and moved over the course of time.  Other times one party has used and maintained the property, by mowing the grass, raking leaves, etc., but has not fenced it in.  All of these sorts of issues present opportunities for counsel to dig up and present helpful facts from the past.   The burden of proof will be on the Plaintiff to show possession for twenty years — they can also “tack on” years in which their predecessor owners used and maintained the property.   The nature of possession that needs to be shown may be different, depending on what kind of property is at issue: “acts sufficient to demonstrate possession of wild, undeveloped forest may fall short of the activity needed to establish possession of developed property.”

If the Plaintiff can demonstrate exclusive possession for 20 years, the burden shifts to the Defendant (the person that has a deed for the property) to show that the use was not adverse.  There are two primary ways to show this: 1) show that the possession was with permission from the landowner; or 2) show that the deeded owners of the land took back possession by acts at least as dramatic as those that were used to obtain possession by the adverse possession claimant.  The “mere act of going upon the land is not enough. The owner must assert his claim to the land or perform some act that would reinstate him in possession, before he can regain what he has lost.”

All of these issues require historical evidence to be amassed and presented; historical imagery to reviewed; and more than likely “I remember when” testimony from people who have been around for 20 years or more.  It is also likely to require the expertise of a good land surveyor.

Dirk Schwenk is real estate attorney from Annapolis, Maryland.  He can be reached at dschwenk@baylawllc.com.  

 

 

Maryland Riparian Rights

Owning waterfront property can be a fantastic experience — the comforts of home with an exceptional view.  But there can be issues, and it important to know the relative rights and responsibilities that go with such property.

To secure riparian rights, one must have a deed that reaches the water (such as the a lake, stream or Chesapeake Bay) and does not contain an express reservation of rights.  Direct and unfettered access to the water (and from the water) is the central right that makes riparian property, and also secures the other crucial issue — the ability to keep anyone from blocking ones view of the water.

Such rights, however, can be encroached upon by a neighbor’s pier, or transferred to a community association for the rights of the community, or otherwise impeded. These situations can create great conflict within a community, and have grave and permanent implications to the economic and personal interests of property owners. The text below provides a general overview of riparian rights, based on Maryland law.  Riparian rights in the Eastern United States are very different from those in the West (where consuming the water is key), so this is most applicable on the East Coast.  For specific questions, please contact us directly.

Maryland’s Court of Appeals has described riparian rights as follows:

“It is well established that the title to land under navigable water is in the State of Maryland, subject to the paramount right of the United States to protect navigation in the navigable waters.

The owner of the fast land, however, has a common law right to land formed by accretion adjacent to the fast land and has the right of access to the navigable part of the river in front of his fast land, with the right to make a landing, wharf or pier in front of his fast land, subject, however, to general rules and regulations imposed by the public authorities necessary to protect the rights of the public.

When the statutory law grants the right to a riparian owner to extend his lot or to improve out to the limits prescribed by the public authorities, the riparian owner receives a ‘franchise-a vested right, peculiar in its nature but a quasi property of which the lot owner cannot not be lawfully deprived without his consent.’

When the lot owner makes improvements in front of his lot, complete title then vests in him in the improvements provided it is in front of his lot and does not appropriate the riparian rights of his neighbors.”

Parsing the language, one finds the following principles.

1. The State owns the land under the water, and the United States has an overriding interest in preserving public navigation.

2. The waterfront property owner has the right to accretion (such as a beach deposited by currents) and access, but a government may regulate access such as piers and wharves to assure that public rights are protected.

3. The right to extend and improve, where granted, transfers with the property.

4. The right to extend and improve does not allow a landowner to intrude on his neighbor’s rights.

5. The riparian owner has the “right of access” to and from the waters.

Other Maryland decisions focus on the “right of access” as the most important issue — and it is.  Access is what is improved when building a pier; access is what is denied if someone else tries to build in front of ones’ waterfront property.

Since everyone has neighbors, the relative rights of one’s neighbors can become an issue, as can the extent of the government’s right to regulate. And such issues can and do evolve into open disputes. If you find yourself in conflict, issues are complicated, and delay may be fatal.  In particular, if a neighbor seeks a permit that you believe interferes with your rights, action should be taken as early as possible.  There are issues on which the local zoning board has a large amount of discretion, and even a reviewing Court may have difficulty unwinding a local decision.

Title Insurance – What Does It Cover?

Title insurance is required in most purchases of real property, but what does it cover?  What losses can a property owner suffer that should be submitted to insurance?  The answer is a bit of a cruel joke among real estate attorneys — Title Insurance does not cover a great deal.

The Court of Special Appeals recently issued a decision in Back Creek Partners v. First American Title – a case which the court helpfully described as “about title insurance, specifically what it does and doesn’t cover.”   The underlying dispute involved issues in the Annapolis neighborhood of Harbor View, a ten home subdivision on a beautiful section of Spa Creek.  Not coincidentally, the question of the appropriate location of an access easement from the lots to the pier has been in litigation there for many years.  It may be the most litigious neighborhood in Maryland.

Back Creek, the developer that purchased, subdivided and created a plat denoting a waterfront access easement, sought to recover its litigation costs from First American Title Insurance Company.  The insurance was supposed to cover any loss or damage incurred if: 1) title to the estate was other than described in the policy; 2) any defect or lien or encumbrance on the title; 3) unmarketability of title; or 4) lack of a right of access to and from the land.  On first read, one might think that there would be coverage for a years-long dispute about the correct location of an access easement which also raises the question of who actually owns what parcel of land.  Not so.

When Defendant Back Creek sought reimbursement for attorneys’ fees incurred defending itself against a lot owner, First American moved for judgment on the basis that 1) the policies had expired; 2) that there was no coverage for the claims; and 3) that they did not receive timely notice of the claim.  These arguments were successful in the trial court.

The Court of Special Appeals ultimately upheld this decision, ruling that the claims made by the homeowner did not fall within the scope of coverage.  “Title insurance in general is meant to protect title to property as it existed at a particular time; these title policies in particular covered claims relating to the title that Back Creek obtained when it bought the property and the titles that it passed to the Harbor View neighbors.”  The case brought against Back Creek did not raise issues about whether there was good title to the real estate, and there were not allegations of a “defect in Back Creek’s title or the titles it conveyed to the Harbor View residents, nor any liens or encumbrances that hadn’t been disclosed.”

The court went on to note that the policy conditions provided coverage only “so long as the insured retains an estate or interest in the land … or so long as the insured shall have liability by reason of covenants of warranty made by the insured.”  In this particular case, Back Creek sold the lot a person, and that person sold the lot to the buyer that sued Back Creek.  Once the second transfer occurred, the court held that this severed Back Creek’s obligations to warrant title, and so even though they were sued, they could not recover their attorneys’ fees from the title insurer.   The Court did emphasize that a title insurer is required to defend a case “if any claim raised by the insured potentially falls within the scope of the policy.”  That was not the case for Back Creek, however.

So what does title insurance cover?  The classic case is where you purchase a property from a person that has a deed, then later another person comes forward with a deed to the same property.  If the other deed is valid, and it is based on a transfer that occurred prior to your chain of title, then you did not actually purchase the real estate because your seller did not own it.  Your losses should be covered by title insurance.  Similarly, if it turns out that there is a prior mortgage or other lien against the property that was not known at settlement, resolving that claim would be covered.  Finally, if it turns out that a piece of property does not actually have access — such as a flag lot where the access strip did not really convey — this should be covered.

A word of caution, however.  It is not infrequent that one person purchases the property with title insurance.  Then, they later transfer the property to an LLC that they own or a family member, and no title insurance is obtained.  Just as in the Back Creek situation, the second transfer likely voids any title insurance.

If you have an issue that may be covered, it is wise to submit the potential claim to the title insurance company as soon as a possible.  Look carefully at whether the Plaintiff alleged claims that may be covered.

Good luck, be careful, and if you need a solid opinion on your rights under a policy, consult a good attorney.

J. Dirk Schwenk is cum laude graduate of the University of Maryland School of Law, and is active cases involving real estate, riparian rights, and vessel purchase issues.  He can be reached at dschwenk@baylawllc.com or 410 775 6805.

 

 

 

Top 5 Waterfront Property Issues

by Dirk Schwenk – dschwenk@waterfrontlaw.com and Mike Piasecki III – mike@marylandwaterfrontproperty.com

There is nothing that can compare to the peace, tranquility and sense of well-being that accompanies ownership of a piece of waterfront property. That feeling should not be disturbed by legal problems that can be prevented or at least managed. In waterfront property there are a few issues that arise with such regularity that they should be considered prior to any purchase. Mike Piasecki, III, Associate Broker, Prudential Carruthers Realtors in Elkton and Ocean Pines (www.marylandwaterfrontproperty.com) and J. Dirk Schwenk, attorney at Baylaw, LLC (www.waterfrontlaw.com) got together to come up with a “top five” list of things that should be thought through. These issues are focused on Maryland waterfront property, but they apply everywhere where piers, views and access to the water are of top concern. Here they are:

1. Community Waterfront versus Private Waterfront.

Many waterfront, waterview and water access properties are located in developments where the original developer subdivided a large tract and reserved the waterfront for the use of all of the houses in the neighborhood. Interior houses may be listed as “water access” properties and have affirmative rights to community beaches, boat ramps and other facilities. In many of these developments, there is also a strip of land that lies along the water and surrounds the entire community and was intended to allow for members of the community to walk and have access to the entire waterfront. The ownership structure of these walks can vary widely, but if they are present, there are special concerns for the homes nearest the water. Those homes may have the right to build and maintain a pier — but the pier may actually be owned by the community and be available for all of the members to use. Or there may be no right to a pier at all. The possible variations are too numerous to list, but an owner purchasing “waterfront” in such a community should be sure to understand exactly what the obligations and benefits are in the particular community.

2. Waterfront versus Waterview.

A true “waterfront” property is one that has riparian rights associated with it. In Maryland and most of the states on the East Coast of the United States, the owner of a property that has riparian rights has the right to apply to construct a pier or other waterfront improvement, has the first right to apply for permits for waterfowl hunting, and has the right to prevent others from impeding access to the water or the view of the water. In contrast, a “waterview” property is generally one that is close to the water, but has land owned by someone else between the land and the shoreline. A waterview may have a limited (or no) right to build a pier and may not have any guarantee that another owner will not build a fence, structure or put in plantings that obstruct the waterview. Careful consideration should be paid to what might be placed between the waterview property and the water — if it is community land on which nothing can be built that is very different than private land on which someone in the future may build a multi-story home.

3. Pier Locations, Boundary Lines and Permits.

Having (or keeping) a pier is a first priority consideration for many waterfront lots. It is not relaxing and fun to have a dispute with a neighbor about whether a pier is on his property, your property, on the line, should be shared, or whether a pier that you were counting on using is even legal in the first place. If you are considering a home where there is currently a pier or where you would like to put in a pier, its continued viability should be examined. First, consult with planning and zoning — was the existing pier built with a permit (or grandfathered?), or if you would like to put in a new pier, can an adequate pier be placed on the site given environmental limitations and the location of neighboring piers? Second, is there any dispute with a neighbor about the location of any of the piers (does a pier encroach the property line extended into the water?) or is there an expectation that a pier will be shared? If you are purchasing a property that is one of several that were previously owned by a single family, it is very common that multiple homes shared a single pier. This sort of agreement should be spelled out — or it can quickly lead to a disagreement.

4. The Obligation and Ability to Maintain the Waterfront.

For any property that faces significant wave action or is on a bluff, there will be erosion concerns. For all waterfront properties, there are significant legal restrictions on the owners’ ability to clear growth and trees, to fill eroded areas, and to construct shoreline protection. The cost and ability to obtain permits for waterfront repairs and maintenance should be considered. For example, in many waterfront communities, there are existing bulkheads or revetments. Depending on the particular community, the cost to maintain these structures may lie with the nearest individual landowner or with the community. In Ocean Pines, Maryland, for example, all properties in the community must pay an annual HOA assessment toward the upkeep of common area facilities, but in the instance of waterfront properties, the assessment may also cover the cost of maintenance to the property’s bulkhead. We say “MAY” because this is true in some sections of Ocean Pines, whereas in other sections, waterfront property owners, although they still pay an annual assessment that is higher than a land locked property, have the cost and burden of bulkhead maintenance placed squarely upon the homeowner. Sounds confusing doesn’t it? This example is exactly why you should consult a waterfront law specialist, and/or waterfront specialist real estate broker before entering into a contract to sell or purchase waterfront property anywhere, but especially in the state of Maryland. Another instance? In Anne Arundel County, Maryland, there have been news reports of criminal charges being filed because a waterfront property owner hired a landscaper to clear trees and bushes along the waterfront. Just like piers, it is wise to consult with knowledgeable professionals and zoning departments before becoming set on plans for improvements.

5. Choose the right professionals.

Purchasing and owning waterfront is meant to improve ones quality of life, and usually it does. There will always be an unfortunate few that end up purchasing a large, unexpected and expensive dispute, and their quality of life is most often not improved. Without question, the best means of avoiding unexpected difficulties is to associate with professionals with experience and interest in waterfront and riparian properties. A good realtor will know the particular area where a property is located, or will know the questions (like the ones above) that must be analyzed in order to know if a property is right for you. A good lawyer will know whether a deed is to transfer all of the rights you expect, (or maybe just some), will be able to spot misunderstandings in pier sharing agreements, and will know how to resolve a dispute that does arise. We hope these pointers help to make your next waterfront property purchase or sale, an enjoyable one!

Dirk Schwenk – dschwenk@waterfrontlaw.com
and Mike Piasecki III – mike@marylandwaterfrontproperty.com