Posted on March 1, 2010 by Davis Wright Tremaine

The Creditors' Rights Endorsement, a Thing of the Past?

Authored by:  Elisabeth Woare

The creditors’ rights endorsement, an endorsement to a lender or owner’s title policy which provides coverage against challenges to a transfer of title as a result of a fraudulent conveyance, fraudulent transfer or preferential transfer, appears to have been essentially eliminated by the title insurance industry earlier this month. Citing the current economic climate, several recent bankruptcy court decisions and recent questioning by state regulators as to whether the coverage is within the “purview” of title insurance, Fidelity National Title Group of Underwriters (which includes Chicago Title, Fidelity National Title, Ticor Title, Lawyers Title, Commonwealth Land Title, Security Union Title and Alamo Title) and First American Title Insurance Company have announced that they will no longer issue the endorsement.  The American Land Title Association (ALTA) has also recently voted to officially de-certify the creditor’s rights endorsement (ALTA Form 21/21-06), effective March 8, 2010. According to the ALTA website, this de-certification of the ALTA form of creditor’s rights endorsement does not affect the ability of title insurers to separately decide what coverage or endorsement, if any, it is willing to provide, it just means that the insurers can no longer use the ALTA form after March 8. 

Prior to the past 18 months, creditors’ rights coverage was fairly common and easy to obtain. Recently, title insurers have been more and more reluctant to provide the coverage, and when they have agreed to provide it, it has come with additional risks and cost in the form of required indemnity agreements protecting the insurer and increased title premiums. Not all title insurers are eliminating the creditors’ rights endorsement out right. Old Republic National Title Insurance Company and Stewart Title Guaranty Company have indicated that they may still issue the endorsement upon review of the seller or mortgagor financials. 

Given the new insurer policies, real estate purchasers and lenders should be aware that they are likely going to have to bear some insolvency risks that were once covered by title insurance policies.

Tags:
Posted on February 22, 2010 by Davis Wright Tremaine

Climate Change to Receive More Attention under NEPA

Authored by:  Craig Gannett, Kerry Shea, Richard M. Glick and Lauren Giles Wishnie

Climate change will receive more attention in the analysis of environmental impacts under the National Environmental Policy Act (NEPA), according to a Draft Guidance issued on Feb. 18 by the White House Council on Environmental Quality (CEQ). Charged with advising federal agencies on the implementation of NEPA, CEQ proposes that the environmental analysis of major projects consider the effect on climate change of greenhouse gases (GHGs) that would be emitted by the proposed project, as well as the potential impact of climate change on the project itself.

See entire article here

Tags:
Posted on February 19, 2010 by Gene Grant

Standard Lease Forms Aren't Always Best

Authored by:  Gene Grant

As published in The Daily Journal of Commerce

Vacancy rates for commercial space, already high, continue to increase. Traditional long-term tenants are in short supply. Out of necessity, landlords are inventing new occupancy arrangements. These creative solutions, however, often require special kinds of occupancy agreements. Common examples include pop-up stores, shared offices, government agencies, and donated space. For more information, see our recent article published in The Daily Journal of Commerce

Tags:
Posted on February 9, 2010 by Davis Wright Tremaine

"My Landlord Wants Me to Sign a Personal Guaranty . . . Should I?"

 Authored by:  John Benazzi

"As published in Santé Magazine"

My brother, the chef, has been looking to open his own place for a number of years now. He tells me that when he finds the "perfect" space, he is going to jump on it. If that happens, I’m sure that I will get a call from my brother asking if I have time to review his lease. He will tell me that it’s the perfect space and that I only need to take a “quick look.” He will also probably tell me that because he’s taken my advice and set up his business as a limited liability entity, that the landlord wants him sign a personal guaranty. He will want to know what that means and whether he should sign it. Here’s what I’ll tell him:

Continue Reading...
Tags:
Posted on February 3, 2010 by Davis Wright Tremaine

New Seattle Ordinance Requires Building Owners to Report Annually on Energy Efficiency

Authored by:  Jim Greenfield, Carly Summers, and Lauren Giles Wishnie

            In an ordinance adopted January 25, 2010 (Council Bill No. 116731) and signed by the Mayor on February 4, 2010 (Ordinance 123226), the Seattle City Council created new energy efficiency reporting requirements for owners of nonresidential and multi-family buildings located in the City of Seattle. The ordinance adopted by an 8-0 vote, will require building owners to provide “energy benchmarking reports” to the Director of the Department of Planning & Development using the federal Environmental Protection Agency’s Energy Star Portfolio Manager or a similar system. Building owners who provide inaccurate reports or who fail to report may be cited and fined or may receive a notice of violation. Building owners must provide copies of the energy benchmarking reports to current and prospective tenants, prospective buyers and lenders who ask for them. This adds new elements of due diligence and disclosure to non-residential lease and sale transactions in the city.

Continue Reading...
Tags:
Posted on January 20, 2010 by Davis Wright Tremaine

Supreme Court Holds Condo Defect Claims Subject to Arbitration

Authored by:  Alan Middleton

In an important decision, on December 24, 2009, the Washington Supreme Court held that claims under the Washington Condominium Act (WCA) are subject to arbitration despite provisions in the Act requiring judicial resolution of claims where condominium owners agree to arbitrate disputes in their purchase and sale agreements. The case is Satomi Owners Ass'n v. Satomi, LLC. 

Continue Reading...
Tags:
Posted on December 23, 2009 by Davis Wright Tremaine

Seattle Landmarks Preservation Ordinance Survives Constitutional Challenge

Authored by: Jim Greenfield and Clayton Graham

This week, the Division One Court of Appeals filed its opinion in the case of Connor v. City of Seattle, which addressed a challenge to the application of Seattle’s Landmarks Preservation Ordinance (LPO) to certain homeowners’ (the Connors) residential property in West Seattle.  When the Connors bought the property, it had a designated Seattle landmark -- a 1906 house built in what is described as the “Seattle classic box” style.  Because the property has a large, sloping, front yard, the Connors subdivided the parcel into multiple lots and proposed building additional residences on the newly-created lots, while preserving the 1906 landmark house on the remainder of the old lot.  When Seattle’s Landmarks Preservation Board—and later the City Hearing Examiner—denied the Connors’ application for a certificate of approval under the LPO for building the new homes, the Connors sued under Washington’s Land Use Petition Act (LUPA).   

After losing in Superior Court, the Connors appealed to the Court of Appeals, which affirmed the trial court’s dismissal of the Connors’ suit.  The bulk of the opinion addresses the Connors’ claims that the LPO is constitutionally void for vagueness, based on the Connors’ contention that the LPO does not specify what kind of development would be permitted on their property.  The Court rejected the “void for vagueness” claim, noting that “the LPO contains contextual standards and a process for clarification and guidance as to individual sites.”  According to the court, these traits shielded the LPO from a “void for vagueness” claim.  The Court summarily dismissed the Connors’ claims that the “site” was never designated along with the house, that the denial violated RCW 82.02.020 (which prohibits certain development conditions), or that it constituted a taking or a substantive due process violation.  Owners of City landmarks should take care to ensure that any proposed development on their property is consistent with preservation of the features designated under the LPO.

Tags: , , , , , ,
Posted on December 11, 2009 by Davis Wright Tremaine

EPA to Regulate Greenhouse Gas Emissions

Authored by:  Lauren Giles Wishnie, Kerry Shea, and Clayton Graham

Findings recently issued by the Environmental Protection Agency (EPA) could be the first step in national regulation of greenhouse gas (GHG) emissions under the Clean Air Act. Although the findings apply only to new motor vehicles and engines for the time being, they lay the groundwork for regulating GHGs emitted by power plants and manufacturing facilities.

Continue Reading...
Tags: , , , , , , , ,
Posted on November 6, 2009 by Davis Wright Tremaine

City and County Governments Authorize Permit Extensions for Active Development Projects

This post is authored by:  Clayton Graham & Thomas Goeltz

Landowners and developers in Washington state should be aware of a spate of recent legislation aimed at prolonging the life of active land development permits. Developers who request these extensions in a timely manner could effectively extend the life of their development approvals—including certain building permits, use permits, subdivision and other land use approvals—and may be able to save themselves the hassle and expense of having to restart the entitlement process for stalled development projects.

Financial difficulties faced by many developers in the state have prompted a number of cities and counties to adopt ordinances that authorize extensions to certain permit expiration dates. These ordinances apply to a variety of development approvals and permits, and a few of them implement automatic permit extensions.

Continue Reading...
Tags: , , , , ,
Posted on October 30, 2009 by Clayton Graham

Building Code Violations - Penalties Struck Down as Unconstitutional

In a recent opinion linked here—Post v. Tacoma, the Washington Supreme Court struck down a number of building code violation penalties that the City of Tacoma had assessed against a property owner. The City assessed numerous fines against the owner (Post) based on the condition of a some of his properties in the City. The ordinance at issue permitted the assessment of daily fines for continuing building code violations, which is a common element of local code compliance provisions. The Court, however, took issue with the fact that the City "ha[d] no procedures in place for civil defendants to appeal any but the first penalty." That is, once fines had begun accruing, there was not an adequate process in place for the landowner to contest the violation. A majority of the Court found that the code provisions authorizing these penalties violated procedural due process requirements and thus were unconstitutional on their face and as applied to Post.

The majority also found that the State’s Land Use Petition Act (LUPA) did not apply to Post’s appeal, so Post was not required to comply with LUPA’s procedural requirements for challenging the City’s action. The dissenting justices, on the other hand, believed that Post’s failure to file his complaint under LUPA precluded judicial review of his claims. This opinion reiterates the importance of an owner’s procedural rights to contest penalties assessed by a city or county. It is also a reminder that an owner should take quick action to address notices of code violations in order to avoid unnecessary expenses.

Tags: , ,