John Parnass of Davis Wright Tremaine, LLP maintains an informative and well-researched blog called the Washington Construction Law blog.
Given that construction and real estate are often joined at the hip on legal matters, it would be a great idea for people interested in real estate to monitor the latest construction law developments on John’sblog.
The US News and World Report online provides a dynamic breakdown of the basic components of the federally-backed loan modification program.
According to the article, here are “Seven things you need to know” about a loan modification:
1. The plan focuses on payments made to lenders rather than the price of the loan. Experts believe that even if the value of the home possesses little or no equity, if the modified loan payment is affordable, the homeowner will continue making payments.
2. The plan would seek to reduce the mortgage payment to 31 percent of the borrower’s gross monthly income. “To that end, the administration’s plan requires participating loan servicers to reduce monthly payments to no more than 38 percent of the borrower’s gross monthly income. The government would then chip in to bring payments down further, to no more than 31 percent of the borrower’s monthly income. In lowering the payment, the servicer would first reduce the interest rate to as low as 2 percent. If that’s not enough to hit the 31 percent threshold, they would then extend the terms of the loan to up to 40 years. If that’s still not enough, the servicer would forebear loan principal at no interest.”
3. The plan would then encourage loan servicer participation by providing cash incentives: “To encourage participation, servicers will be paid $1,000 for each modification and will get an additional $1,000 payout each year for as many as three years, as long as the borrower continues making payments. Borrowers, meanwhile, can get up to $1,000 knocked off the principal of their loan each year for as many as five years if they make their payments on time. Neither party can receive the cash incentives until the modified loan payments have been made for at least three months.”
4. The plan would only apply to those under financial hardship. Only owner-occupied residences with an outstanding balance of $729,750 or lower would be eligible. (Sorry, no speculators.)
5. The plan will require the loan modification to meet the net present value test. What this means is that the lenders would compare the expected cash flow of the proposed modified loan with the expected cash flow of the loan unmodified. If the modified loan would create more cash flow, then the loan will be modified and or restructured.
6. The plan will offer loan servicers with incentives to extinguish second lienslike home equity lines of credit.
7. The plan may or may not work. (Not the most satisfying conclusion, I know).
Please refer to the full US News and World Report article by Luke Mullins here.
The Washington Construction Law blog submitted a recent post about a decision in Division III Court of Appeals. In Walla Walla College v. Ohio Cas Ins. Co., No. 26647–8–III, the court had to decide when damage occurred to property from leaking of underground storage tanks.
Walla Walla College obtained an insurance policy with Ohio Cas Ins. Co. covering the installation of gas tanks on its property in the early 1990s. Though the tanks failed in 2001 (leaking gas resulting in property damage) Walla Walla College claimed that the policy from the early 1990s should cover the cleanup costs because the tank failure was caused to faulty installation by an construction company.
Washington Construction Law blog sums it up as follows:
“Division III held that mere stress to the tank was not enough to constitute “property damage” and therefore denied coverage for the loss under the 1990-1992 policies. First, the Court noted that the “your product” exclusion” negated any coverage for loss in value to the tank itself. Next, the Court distinguished continuous trigger cases such asGroul Construction Co., Inc. v. Ins. Co. of North America, 11 Wn.App 632 (1974) by noting that while “a process began” in 1991, the “property damage did not occur until the tank failed in September 2001, long after the policies had expired.”
Tacoma’s City Council wants to modify the current zoning law to attract new business to many of Tacoma’s neighborhoods. The Council hopes to make Tacoma more attractive by easing height and building limitations.
In a recent article by Peter Callaghan, one of the central issues to the new re-zoning plan is balancing the goal of having attractive, well-built development vs. the ability for developers to have projects that “pencil” (meaning that a project can be projected to be profitable).
What the article does not discuss, curiously, are the impacts on development by state environmental agencies. Often times, it is the extra cost involved with preparing environmental studies and altering business practices to meet regulatory standards which impacts whether a project is ultimately profitable.
For someone to adversely possess someone else’s property, the law requires the possession to have lasted continuously for a minimum of 10 years (or 7 years under color of title — usually meaning that the individual was paying taxes on the adversely possessed property). That is logical when the property is readily identifiable between two neighboring property owners. But does that apply when the property owner is not actually occupying the property? Can a non-owner, like a relative, renter, or friend occupy the property and preserve the 10-year requirement?
Wendy Koch, a fellow associate at Dickson Steinacker, provided the following authority regarding just that issue:
“Defendants cite no authority in support of their contention that Plaintiff must personally testify in an adverse possession case, especially where he adversely possesses through his wife and children which inures to his benefit. Instead, it is well settled law that an adverse possessor may possess through his tenant (O’Brien v. Schultz, 45 Wn.2d 769, 278 P.2d 322 (1954);Foote v. Kearney, 157 Wash. 681, 290 P. 226 (1930); Flint v. Long, 12 Wash. 342, 41 P. 49 (1895)), and may possess through his contract purchaser (McAuliff v. Parker, 10 Wash. 141, 38 P. 744 (1894)). By analogy then, he may possess through his family members
According to The News Tribune, Puget Sound area municipalities are having to balance the needs of their growing populations with the impact to their ecosystems. At the heart of the debate is whether sand and gravel mines are going to be allowed in Western Washington, with many opponents asserting that the Puget Sound is simply too complex an environment to support these installations. Proponents of gravel mines argue that they are a necessary element of development.
This article outlines the growing tension between powerful environmental lobbies and the business community. At present, organizations such as People for Puget Sound are pushing for ever more limitations and environmental regulations for gravel pits.
Companies like Glacier Northwest argue that they are doing all in their power to lessen the impact to the environment that their activities produce, however, they argue that their service is necessary. In the end, they hope that their activities will yield a net positive effect (like the Chambers Bay Golf Course).
It is almost always the case, that a servient estate holder cannot unilaterally move an easement located on his property.
What if the use of the easement is far smaller than the area provided? For example, suppose an easement was created which was 100 feet wide, but the roadway providing the ingress/egress to the dominant estate holder was only 25 feet wide? What if the placement of the road was such that using the balance of 75 feet was impossible? Since the dominant estate holder’s access could remain the same if the 25 feet was located on a any section of the 100 foot easement, should the servient estate holder be able to shift the road to a different portion of the easement?
There is no clear answer to this question, as Washington State courts have not dealt with this particular issue. They have held that “where a right of way is established by reservation, the land remains the property of the owner of the servient estate and he is entitled to sue it for any purpose that does not interfere with the proper enjoyment of the easement.” Thompson v. Smith, 59 Wn.2d 397, 408 (1962). In Thompson, there existed an road on an easement which only used one half of the easement. The balance of the easement was unused, so the servient estate holder built a concrete slab extending into the easement. This was found to be within his rights as a property owner because the placement of the slab did not ultimately interfere with the use of the easement. This is not the same as having a road and moving it unilaterally, however.
In an analogous case, Crisp v. VanLaecken, 130 Wn.App. 320, 324 (1960), the court held that the servient estate holder could not make “reasonable changes in the location or dimensions of an easement . . . to permit normal use or development of the servient estate.” This held, even thoughthe easement itself would not have been harmed.
There is more precedent which mirrors Crisp, essentially favoring uniformity, stability, and predictability in property rights. So, even though there is not a case on point as to whether a road within an easement can be shifted, courts in Washington like to err on the side of stability/predictability in property rights. It is almost as though the road within an easement is another easement within an easement.
Recently, an interesting issue developed over the applicability of Washington State’s statute regarding waste caused to an easement. 
The facts are fairly straightforward: an individual owned property burdened by an easement for ingress/egress, which benefited his neighbors. The actual road was considerably smaller than the easement area provided and was located in a rural section of Washington. A dispute arose when he shifted the road to a section of the easement which would allow him expanded use of the remaining unused portion of the property. Needless to say, the road was significantly impacted by this conduct, such that the court required him to replace the road to the prior location (which was essentially running down the center of the easement). To that end, the neighbors expended a significant amount of attorney’s fees. In order to recoup their expenses, they invoked RCW 4.24.630 (Washington’s waste statute) which states that if you wrongfully go onto the land of another and cause injury to the property, you are eligible to recover treble damages, PLUS attorneys fees and costs.
The tripwire for invoking this law is that it is contingent on a form of trespass. Recovery for damage to an easement is different (and impossible, most would say) because if the easement is on the trespasser’s property, then it is virtually impossible to “go onto the land of another” since by definition an easement still remains the property of the burdened estate. Though there is not a wealth of authority in Washington which supports this, however there is a key decision in Colwell v. Etzel, 119 Wn. App. 432, 81 P.3d 895 (2003) where an appeals court criticizes the trial court’s interpretation of RCW 4.24.630. In that case, the trial court said that the statute did not mean that somehad had to physically enter on the land of another, but that trespassing was satifised if someone’s “interest in land” harmed or interfered with. The appeals court dissagreed, saying that the statute is clearly worded, and requires that there be an actual physical trespass before it can be utilzed to recover fees and treble damages. There are other decisions which support this, but they are unpublished (espcially a 9th Cirucuit case — Ehlers v. ConocoPhillips).
There is also the aspect of the law itself in that it is considered punitive by the court. As such, it MUST be construed narrowly. The end result is that there is simply not enough room left for interpretation and the law must be read to mean what it says…only going onto the land of another will trigger RCW 4.24.630. Consequently, if you go onto an easement located on your property and cause damage to it, you may be liable for the damage, but you are NOT liable for attorney’s fees and treble damages under RCW 4.24.630.