Chapter 19Constitutional Issues

in Real Estate

Key Amendments

2

Fourth Amendment. Protects against unreasonable searches and seizures.

Fifth Amendment. – Depriving people of property without due

process– Taking property without just compensation

Fourteenth Amendment– States may not deprive people of property

without due process– Equal protection clause (e.g. prohibits

states from passing racially discriminating real estate laws)

– Shelley v. Kraemer, 334 US 1 (1948) Held void a private contract not to sell to “any person not of the Caucasian race”

5th Amendment Excerpt “…nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

4th AmendmentThe right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

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14th Amendment Excerpt

“…nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws”

Eminent Domain: Takings 5th Amendment

Proper purpose: public purpose– Economic development issues– Kelo case

Taking or regulating Just compensation

Kelo v. City of New London (#1)545 US 469 (2005), p. 538

City took property to give to a developer.

4The house was moved to this location.

Development larger for Pfizer and it pulled out in 2009 – pulling 1,400 jobs out of the area. Used as a dump after hurricane Irene.

Takings Clause

5

End of chapter Q 2:, p. 554: State takes property for an overpass to benefit a developer and it hurts other property owners.

Portion of Revised MN law post Kelo

Other Constitutional Issues

Zoning Annexation

What is fair market value when project itself drives up cost? Consider 19.2, p. 543.

Nollan v. California Coastal Commission (#2)483 US 825 (1987), p. 541

Nollan leased property with an option to buy conditioned on demolishing the bungalow.

The California Coastal Commission denied the permit to build.

– The house would block the ocean view

– The house would inhibit the public psychologically from using the beach

A taking?7The house was moved.

Faria Park

Nollan’s Land

The CovePark

Proposed House

Easementm

Potomac Development v. DC

The house was moved.

• DC told landowners that their property would be taken to build a bridge in 2006.

• The bridge was not built by 2009 and landlords sued for taking.• Could not rent or improve the property.• Value went up from $14 million to $20 million in those years

because of the stadium.

Taylor v. Rancho Santa Barbara (#X)206 F3d 932 (9th Cir 2000), p. 545 (Age 55 restriction in mobile home park.)

The house was moved.

HOPA – Housing for Older People Act• Taylor bought home at age 41 but only 55 year olds allowed. • 80% occupied by someone over 55, Why 55?• 100% for people over 62.• Rationale

• Government interest in protecting housing for older people• Safe, supportive environment• Smaller• Low cost land (no need for nearby schools/employment)• Thinner walls/units closer together

Meyer v. Holley (#3)537 US 280 (2003)

Discrimination by agent – does that make the owner of the agency liable? Respondeat Superior.

The house was moved.

Fair Housing Act

Categories protected by the statute:– A handicap is a mental or physical impairment

that limits one or more major life activities. – Impairments in sight, mobility, and hearing – Mental illness, heart disease, cancer, cerebral

palsy, multiple sclerosis, diabetes, AIDS, HIV, and treatment for substance abuse

– Not covered: smokers and current drug abusers

Fair Housing Act

Exemptions– Owner– Religious organizations– Senior citizen age restrictions

Fair Housing Act Consider 19.3

a) “Spacious 1- & 2-bedroom apartments in quiet mature complex. No pets, please.”

b) “2-person limit.”

c) “Adults pref.”

d) “No children.”

e) “Mature Christian handyman wanted to share house.”

f) “Ideal for professionals.”

g) “Mature setting.”

h) “Within walking distance.”

i) “Handyman’s dream.”

j) “No alcoholics.”

k) “Female tenant wanted.”

l) “Near church.”

m) “Desirable neighborhood.”

n) “Call Betsy.”

o) “No pets.”

Fair Housing Act Prohibited Activities

Steering Blockbusting Redlining (applies to lending, appraisal, and

insurance as well)

Discrimination

Consider 19.4. Denying Navajo land loans based on high default rates.

The house was moved.

End-of-Chapter 4, p. 557: Insurance denied because of high rates of vandalism, arson and theft in the neighborhood.

Cincinnati Neighborhood

End-of-Chapter Q7, : Property given “… so long as used for municipal parks…for whites only.”