Source: http://www.nlrg.com/legal-content/the-lawletter/author/alistair-d-edwards
Timestamp: 2019-04-18 18:58:24+00:00

Document:
Recently, in Forshee v. Neuschwander, 2018 WI 62, 914 N.W.2d 643 (Wyo. 2018), the Wisconsin Supreme Court considered this exact issue.
But, what happens when there is more than one owner of the property (co-owners) and only one of the owners signs the broker's contract? Is that contract biding on the nonsigning co-owner? Recently, in Jacobs v. Locatelli, 8 Cal. App. 5th 317, 213 Cal. Rptr. 3d 514 (2017), the court wrestled with this exact issue.
It is not unusual for a borrower (mortgagor) who is facing foreclosure to attempt to obtain a loan modification from the lender (or the servicer acting for the lender). However, even if the borrower requests a loan modification, this does not automatically put the foreclosure process on hold. Nor does the lender (mortgagee) automatically violate some sort of duty owed to the borrower by proceeding with the foreclosure even though a loan modification has been requested.
For example, in Afridi v. Residential Credit Solutions, Inc., No. CV 15-13632-NMG, 2016 WL 3017382 (D. Mass. May 24, 2016), the U.S. District Court for Massachusetts recently held that the lender (or the servicer acting for the lender) did not breach its implied duty of good faith by proceeding with a foreclosure sale while the borrower was attempting to obtain a loan modification. In that case, the servicer sought to foreclose, and in order to avoid that outcome, the borrower applied for a mortgage modification under the Home Affordable Modification Program ("HAMP"). The servicer initially denied the application as incomplete. The servicer ultimately provided a list of the missing documents and the borrower updated his application. However, the servicer scheduled a foreclosure sale without first rendering a decision on the borrower’s modification application. The servicer ultimately denied the application.
The Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601 et seq., requires a mortgage lender (a mortgagee) to provide certain disclosures to the borrower (mortgagor). If these disclosures are not made, the borrower may have the right to rescind. Under TILA, when a loan is secured by the borrower's principal dwelling, the borrower may rescind the loan agreement if the lender fails to deliver certain forms or to disclose important terms accurately. TILA requires creditors to provide borrowers with clear and accurate disclosures of terms dealing with things like finance charges, annual percentage rates of interest, and the borrower's rights. Failure by the lender to deliver these disclosures may permit a borrower to rescind the loan transaction.
However, is a person who is not personally liable on the loan but who is the owner of the dwelling that is used to secure the loan entitled to the TILA disclosures and the right to rescind? Recently, in Lakeview Loan Servicing, LLC v. Pendleton, 2015 IL App (1st) 143114, ___ N.E.3d ___ (not yet released for publication), the Appellate Court of Illinois considered this exact issue.
Does a party buying mineral rights have to disclose to the vendor before the sale that it already has a deal in place to sell the mineral rights to a third party for a much higher price? In McCarthy v. Evolution Petroleum Corp., 2014-2607 (La. 10/14/15), 2015 WL 5972515, the court recently considered the novel issue of whether a mineral lessee who had purchased the lessor's mineral rights was liable to the lessor under a fraud-by-silence claim when the lessee failed to disclose to the lessor at the time of the purchase that it had already negotiated the resale of the rights to a third party for a significantly higher price.
In considering this issue, the court pointed out the well-established rule (codified by Louisiana statute) that "[a] mineral lessee is not under a fiduciary obligation to his lessor, but he is bound to perform the contract in good faith and to develop and operate the property leased as a reasonably prudent operator for the mutual benefit of himself and his lessor." La. Rev. Stat. Ann. § 31:122. This language, which focuses on mineral development operations, not the selling of mineral rights, did not, according to the court, impose on the lessee/purchaser a duty to disclose to the lessor/vendor that the lessee already had a deal in place to resell the mineral rights to a third party for a much higher price.
Under the stranger-to-the-deed rule, a deed with a reservation or exception by the grantor in favor of a third party, a so-called stranger to the deed, does not create a valid interest in favor of that third party. For example, a reservation in a deed purporting to create a life estate in a third party (a stranger) may very well be ineffective. Many jurisdictions still adhere to some form of the stranger-to-the-deed rule.
What happens, though, when a grantor gives a deed containing a right of first refusal in favor of a third party or parties? In other words, the grantor did not create a right of first refusal in himself but in favor of a stranger to the transaction. The effect of a right of first refusal, also called a preemptive right, is to bind the selling party to not sell without first giving the person holding the right the opportunity to purchase the real property at the price specified. But does the stranger-to-the-deed rule invalidate a right of first refusal given to the third party/stranger?
Recently, in Francis v. Kings Park Manor, Inc., No. 14-cv-3555 (ADS)(GRB), 2015 WL 1189579 (E.D.N.Y. signed Mar. 16, 2015), the U.S. District Court for the Eastern District of New York held that an African-American apartment resident had a plausible claim for breach of the implied warranty of habitability based on the harassing behavior of a next-door neighbor tenant. In that case, the plaintiff's next-door neighbor, among other things, repeatedly made racially offensive comments and threats to the plaintiff, which conduct led at one point to the neighbor's arrest for aggravated harassment. Despite the plaintiff's complaints to the property management company in charge of the apartment complex, the management company took little action to address the plaintiff's complaints.

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