Relating to Real Estate
Relating to Real Estate - March 2022
IN THIS ISSUE:
BUSINESS INTERRUPTION INSURANCE REQUIRES PHYSICAL DAMAGE
COURT STRIKES PORTION OF LANDLORD-TENANT LAWS PASSED BECAUSE OF COVID-19
FORECLOSURE PURCHASER CANNOT AVOID THE RUNNING OF INTEREST DUE TO COVID-19
MERELY THREATENING A RESIDENTIAL EVICTION IS ACTIONABLE
PRESCRIPTIVE EASEMENTS FOR LIGHT AND AIR DO NOT EXIST IN MARYLAND
SPEAKING OF REAL ESTATE
Business Interruption Insurance Requires Physical Damage
InCordish Companies, Inc. v. Affiliated FM Ins. Co., No. CV ELH-20-2419, 2021 WL 5448740 (D. Md. Nov. 22, 2021), the U.S. District Court for the District of Maryland ruled against The Cordish Companies, Inc. in its claim against insurer Affiliated FM Insurance Company pursuant to an “all risk” business interruption insurance policy for losses incurred during the COVID-19 pandemic. The court held that the business interruption losses that Cordish claimed needed to be accompanied by physical loss or damage.
Cordish’s insurance policy provided $1 billion of coverage for business interruption losses and property damage relating to 97 properties. The premium for the policy was almost $2 million.
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Contact Ed Levin | 410-576-1900
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Court Strikes Portion of Landlord-Tenant Laws Passed Because of COVID-19
In Willowbrook Apartment Assocs., LLC v. Mayor & City Council of Baltimore, No. 20-CV-01818-SAG, 2021 WL 4441192 (D. Md. Sept. 27, 2021), a group of residential landlords (Plaintiffs) filed a complaint in the U.S. District Court for the District of Maryland challenging the constitutionality of laws passed by the City of Baltimore, Howard County, and the City of Salisbury (Defendants) in response to the COVID-19 pandemic.
In late May and early June 2020, the Defendants each enacted temporary legislation (collectively, the Acts) restricting landlords from increasing rent or assessing late fees to tenants.
The Plaintiffs were successful on only one count of their complaint.
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Contact Ed Levin | 410-576-1900
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Foreclosure Purchaser Cannot Avoid the Running of Interest due to COVID-19
In three cases decided between November 19, 2021, and November 22, 2021, North Star Properties, LLC argued before the Court of Special Appeals (CSA) that it, as the purchaser at foreclosure sales, should not be required to pay interest on a portion of the purchase price for the time that the Chief Judge of the Court of Appeals of Maryland (Court) stayed pending foreclosure proceedings during the COVID-19 pandemic. North Star also asked that it not be required to pay real property taxes on the property during the stay.
The CSA declined both requests.
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Contact Ed Levin | 410-576-1900
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Merely Threatening a Residential Eviction Is Actionable
In a divided decision, in Wheeling v. Selene Fin. LP, 473 Md. 356, 250 A.3d 197 (2021), the Court of Appeals (Court) reversed the Court of Special Appeals (CSA) and held that posting notices by the servicer of two residential mortgage loans threatening to lockout the residents of properties securing those loans violated Real Property Article (RP) §7-113. As a result, the Court permitted the plaintiffs to claim damages for emotional distress.
RP §7-113 prohibits people from using self-help to evict occupants of residential properties. That statute prohibits locking out a resident or depriving the resident of water, utility and other services, which the servicer did not do. The law also prohibits a person from “taking any other action that deprives the protected resident of actual possession.”
This case involves residential loans that were in default. The servicer made no effort to determine whether the properties were vacant. They were not, but the servicer posted notices of eviction on the properties that secured the loans. One of the properties was occupied by tenants and the other by the homeowners. In neither case did the servicer actually evict the residents. The plaintiffs filed a proposed class action in the Circuit Court for Baltimore City.
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Contact Ed Levin | 410-576-1900
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Prescriptive Easements for Light and Air Do Not Exist in Maryland
Gestamp Wind N. Am., Inc. v. All. Coal, LLC, No. 1787, Sept. Term, 2019, 2021 WL 3612747 (Md. Ct. Spec. App. Aug. 16, 2021), addresses a battle between two sources of energy: wind power and coal.
Mettiki Coal, LLC owned and operated a coal cleaning and processing plant near Oakland, Maryland. It piled the refuse after extracting coal in huge piles on its property, and then covered the mounds with topsoil and vegetation. Metteki was required by the Maryland Department of the Environment to limit the height of the refuse piles to 3,203.5 feet. It received approval to increase the height to 3,285 feet, and then it applied to raise the limit again.
Gestamp Wind North America, Inc., which owned adjoining property, operated a wind farm. In 2009, Mettiki entered into an easement agreement with a predecessor of Gestamp that granted the owner of the wind farm rights-of-way across portions of Mettiki’s property for construction and access purposes.
Gestamp brought an action in the Circuit Court for Garrett County alleging a “wind interference claim” and a “coal dust damages claim.” The circuit court ruled in favor of Mettiki, and the Court of Special Appeals (CSA) affirmed.
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Contact Ed Levin | 410-576-1900
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Speaking of Real Estate
Presentations
Edward J. Levin was a panelist on the webinar titled “Shelter Senior Living IV, LLC v. Baltimore County — Recordation and Transfer Taxes in Sales Including Intangible Property,” at the Maryland State Bar Association’s (MSBA) Real Property Section’s Commercial Real Estate Discussion Group Lunch on March 8, 2022.
Edward J. Levin will be a panelist on the webinar titled “Recent Cases Regarding Real Estate” at the MSBA’s Real Property Section’s Commercial Real Estate Discussion Group Lunch on April 12, 2022.
Edward J. Levin will be a panelist on the webinar titled “Legal Opinions in Real Estate Transactions: What You Need To Know” for the American Law Institute (ALI) on May 17, 2022.
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