Real Property Law

'As Is' Provision in Sale Contract Does Not Preclude Action for False Statements on Statutory Disclosure Statement

Calvente v. Levy

NYLJ 5/4/06, p. 29, col. 4

AppTerm, 9^th & 10^th Districts

(memorandum opinion)

In an action by purchaser seeking damages for seller's false statements on a property condition disclosure statement, seller appealed from a Justice Court judgment awarding purchaser $1500. The Appellate Term affirmed, holding that the 'as is' provision in the contract of sale did not preclude an action for false statements on the disclosure statement.

Section 462(1) of the Real Property Law requires sellers of residential real property law to complete a property condition disclosure statement prior to the signing of a contract by buyer, and requires that the statement be attached to the contract of sale. The statute also provides that it is not designed to prevent the parties from entering into a contract for the sale or real property 'as is.' Seller in this case completed the disclosure statement, but represented that there were no flooding, drainage, or grading problems that resulted in standing water on any part of the premises. In fact, seller knew that there had been water leakage in the basement during a severe storm. The contract of sale provided that the purchaser was buying the premises 'as is.' After the sale was complete, purchaser brought this action for damages due to water leakage in the basement.

In affirming the Justice Court's damage award, the Appellate Term noted that if it were to hold that an 'as is' sales contract precluded an award of damages for making false statements on the disclosure form, the statutory requirement would in effect be nullified. The court noted that the statute did not prevent a seller who accurately discloses property conditions from then entering into an 'as is' sale contract. False disclosures, however, open the seller up to claims for violation of the statute.

Knowledge of Encroachment Defeats Prescriptive Easement Claim

Morales v. Riley

NYLJ 4/24/06, p. 38, col. 2

AppDiv, Second Dept

(memorandum opinion).

In an action for trespass and for a declaratory judgment that neighbor did not have a prescriptive easement over landowner's land, landowner appealed from a Supreme Court judgment limiting damages for trespass and declaring that neighbor had acquired a prescriptive easement. The Appellate Division reversed, holding that neighbor had not acquired a prescriptive easement and increasing the trespass damage award.

Neighbor's paved driveway en-croaches on landowner's land. Neighbor uses the driveway, including the encroachment, to store her boat. Neighbor acknowledged that, within 10 years of taking title to her parcel, she learned of the encroachment. Supreme Court nevertheless held that neighbor had acquired a prescriptive easement. Supreme Court nevertheless awarded landowner $1000 for trespass.

In reversing, the Appellate Division first held that neighbor's knowledge of the encroachment rebutted the presumption of hostility and defeated her claim of right. As a result, the court held that landowner was entitled to a declaration that neighbor had not acquired a prescriptive easement. With respect to damages, the court noted that neighbor had testified that it had cost her $3400 per year to store her boat elsewhere. The court held that the rental value of the area occupied should be determined by reference to these storage costs. As a result, given the 2.5-year period in dispute, landowner was entitled to $8500 in damages.

 

Landowners Raise Question Of Fact About Stigma Damages

Turnbull v. MTA New York City Transit

NYLJ 4/24/06, p. 35, col. 1

AppDiv, Second Dept

(memorandum opinion)

In an action by landowners for damages resulting from an oil spill, landowners appealed from Supreme Court's award of summary judgment to the Transit Authority. The Appellate Division reversed and remanded, holding that landowners had raised question of fact about the possibility of remediation and about the stigma damages caused by the spill.

During the 1992 replacement and closure of an oil tank at a Transit Authority Bus Depot, the Transit Authority learned of an oil leak. The Authority alleges that in 1998, it learned that a plume of diesel fuel had migrated under landowners' properties. The following year, the state Department of Environmental Conservation (DEC) notified landowners that the leak had occurred and that remediation was underway. At that point, landowners brought this action for damages pursuant to section 181 of the Navigation Law. In 2001, the Authority and DEC entered into a consent order that required the Authority to continue remediation efforts until they were no longer required. In 2002, the Authority moved for summary judgment in landowners' action, contending that landowners had suffered no damages because the plume had not caused any physical injury, posed no health risk, and was in the process of remediation. Landowner submitted affidavits from an environmental engineer who claimed that remediation efforts were unlikely to restore the properties to their pre-contamination state in light of the 70,000-gallon leak, and from a real estate appraiser who concluded that presence of the plume would diminish market value of the properties. Supreme Court nevertheless granted summary judgment to the Authority, and adhered to that determination even after, on motion for renewal, landowners submitted additional expert testimony about the extent of contamination and its impact on market value. Landowners appealed.

In reversing, the Appellate Division noted the when premises cannot be restored to pre-spill condition, landowner is entitled to damages equal to the diminution of value plus the costs of repairs. Moreover, damages include loss in market value due to the stigma of contamination, even when the contamination itself does not pose significant health risks. In this case, the court concluded that landowners had raised questions of fact both about the possibility of complete remediation and about the impact of any stigma on market value. As a result, the court held that Supreme Court had improperly granted the summary judgment motion.

 

Summary Judgment Inappropriate on Riparian Rights Claim

Mascolo v. Romaz Properties, Ltd.

NYLJ 4/24/06, p. 33, col. 6

AppDiv, Second Dept

(memorandum opinion)

In an action by riparian owners claiming ownership of a boat basin and seeking to exclude neighboring riparian owner from using the boat basin, plaintiff riparian owner appealed from Supreme Court's grant of summary judgment to the neighboring owner. The Appellate Division modified, holding that questions of fact about the origins of the boat basin precluded grant of summary judgment to either party.

Plaintiffs and defendant owns parcels abutting a boat basin that leads to Orowoc Creek. Plaintiff landowners contend that the boat basin was created artificially from land entirely within the confines of plaintiff landowners' property. Defendant landowner contends that the boat basin was created naturally and that, as a riparian owner, defendant was entitled to cross the boat basin to obtain access to the creek. The Supreme Court awarded summary judgment to defendant landowner.

In modifying, the Appellate Division emphasized that a riparian owner's right of access is qualified by the rights of the owner of submerged land over which the riparian owner must cross. Here, because the plaintiff landowners raised questions of fact about whether the defendant's property abutted a navigable body of water and about whether the boat basin was natural or man-made, the court held that summary judgment was inappropriate.

COMMENT

A riparian landowner's right of access to waterways above land of a neighboring owner includes the right to affix floating docks and the right to dredge underwater silt to maintain reasonable access. Thus, in Town of Hempstead v. Oceanside Yacht Harbor, 38 A.D.2d 263, the court held that the owner of underwater land was not entitled to collect rent from a riparian owner who operated several docks in water above neighboring owner's land. Riparian landowner owned a repair service marina on property that abutted the underwater land of neighboring plaintiff, above which he rented out dock slips to his individual boat owners. The court noted that the trial court had found that the docks did not interfere with public navigation and then held that use by the riparian owner was permitted as being necessary for its enjoyment of its riparian right of access in operating its marina. Similarly, in Town of Oyster Bay v. Commander Oil, 96 N.Y.2d 566, the court held that a landowner could dredge the accumulation of silt below the surface of the harbor in which it had riparian rights, if dredging would not interfere with the underwater landowner's rights. There, defendant oil company maintained docks above underwater land owned by the Town, which sought an injunction to prohibit the dredging. The court concluded that since the dredging was only to maintain reasonable access, and did not expand riparian owner's rights, dredging was permitted.

The rights of the riparian owner, however, do not permit the owner to create hazardous conditions for neighbors or members of the public seeking to use the abutting waterway, and do not permit the riparian owner to interfere with the existing use of underwater land. Thus, in Haher's Sodus Point Bait Shop v. Wigle, 139 A.D.2d 950, the court held that when use of riparian owner's docks interferes with public use and creates a hazardous condition, the riparian owner has no right to maintain the docks above a waterway owned by neighbor. In Haher's Sodus, pursuant to new legislation, the Village Zoning Board of Appeals denied an application by riparian owner to continue using some of its docks. The court pointed to evidence that the size of the docks caused boats to make a wide sweep around them into shallow water, creating hazardous conditions. In addition, because the docks extended so far into the water, they interfered with the riparian rights of neighboring properties. Even when the riparian owner is a municipal owner, the riparian owner may not use the waterway in a manner that interferes with safe access to the waterway by neighbors. Thus, in 627 Smith Street Corp. v. Bureau of Waste Disposal of the Department of Sanitation of the City of New York, 289 A.D.2d 472, the court held that the Sanitation Department effected a taking of its neighbor's rights, requiring compensation, when the Department maneuvered barges in a way which caused damage to its plaintiff neighbor's bulkhead and prevented the neighbor from providing safe berth for its vessels. The court concluded that since the action by the Sanitation Department effectively denied the plaintiff their riparian right of access to the waterway, the Sanitation Department was liable for inverse condemnation.

'As Is' Provision in Sale Contract Does Not Preclude Action for False Statements on Statutory Disclosure Statement

Calvente v. Levy

NYLJ 5/4/06, p. 29, col. 4

AppTerm, 9^th & 10^th Districts

(memorandum opinion)

In an action by purchaser seeking damages for seller's false statements on a property condition disclosure statement, seller appealed from a Justice Court judgment awarding purchaser $1500. The Appellate Term affirmed, holding that the 'as is' provision in the contract of sale did not preclude an action for false statements on the disclosure statement.

Section 462(1) of the Real Property Law requires sellers of residential real property law to complete a property condition disclosure statement prior to the signing of a contract by buyer, and requires that the statement be attached to the contract of sale. The statute also provides that it is not designed to prevent the parties from entering into a contract for the sale or real property 'as is.' Seller in this case completed the disclosure statement, but represented that there were no flooding, drainage, or grading problems that resulted in standing water on any part of the premises. In fact, seller knew that there had been water leakage in the basement during a severe storm. The contract of sale provided that the purchaser was buying the premises 'as is.' After the sale was complete, purchaser brought this action for damages due to water leakage in the basement.

In affirming the Justice Court's damage award, the Appellate Term noted that if it were to hold that an 'as is' sales contract precluded an award of damages for making false statements on the disclosure form, the statutory requirement would in effect be nullified. The court noted that the statute did not prevent a seller who accurately discloses property conditions from then entering into an 'as is' sale contract. False disclosures, however, open the seller up to claims for violation of the statute.

Knowledge of Encroachment Defeats Prescriptive Easement Claim

Morales v. Riley

NYLJ 4/24/06, p. 38, col. 2

AppDiv, Second Dept

(memorandum opinion).

In an action for trespass and for a declaratory judgment that neighbor did not have a prescriptive easement over landowner's land, landowner appealed from a Supreme Court judgment limiting damages for trespass and declaring that neighbor had acquired a prescriptive easement. The Appellate Division reversed, holding that neighbor had not acquired a prescriptive easement and increasing the trespass damage award.

Neighbor's paved driveway en-croaches on landowner's land. Neighbor uses the driveway, including the encroachment, to store her boat. Neighbor acknowledged that, within 10 years of taking title to her parcel, she learned of the encroachment. Supreme Court nevertheless held that neighbor had acquired a prescriptive easement. Supreme Court nevertheless awarded landowner $1000 for trespass.

In reversing, the Appellate Division first held that neighbor's knowledge of the encroachment rebutted the presumption of hostility and defeated her claim of right. As a result, the court held that landowner was entitled to a declaration that neighbor had not acquired a prescriptive easement. With respect to damages, the court noted that neighbor had testified that it had cost her $3400 per year to store her boat elsewhere. The court held that the rental value of the area occupied should be determined by reference to these storage costs. As a result, given the 2.5-year period in dispute, landowner was entitled to $8500 in damages.

 

Landowners Raise Question Of Fact About Stigma Damages

Turnbull v. MTA New York City Transit

NYLJ 4/24/06, p. 35, col. 1

AppDiv, Second Dept

(memorandum opinion)

In an action by landowners for damages resulting from an oil spill, landowners appealed from Supreme Court's award of summary judgment to the Transit Authority. The Appellate Division reversed and remanded, holding that landowners had raised question of fact about the possibility of remediation and about the stigma damages caused by the spill.

During the 1992 replacement and closure of an oil tank at a Transit Authority Bus Depot, the Transit Authority learned of an oil leak. The Authority alleges that in 1998, it learned that a plume of diesel fuel had migrated under landowners' properties. The following year, the state Department of Environmental Conservation (DEC) notified landowners that the leak had occurred and that remediation was underway. At that point, landowners brought this action for damages pursuant to section 181 of the Navigation Law. In 2001, the Authority and DEC entered into a consent order that required the Authority to continue remediation efforts until they were no longer required. In 2002, the Authority moved for summary judgment in landowners' action, contending that landowners had suffered no damages because the plume had not caused any physical injury, posed no health risk, and was in the process of remediation. Landowner submitted affidavits from an environmental engineer who claimed that remediation efforts were unlikely to restore the properties to their pre-contamination state in light of the 70,000-gallon leak, and from a real estate appraiser who concluded that presence of the plume would diminish market value of the properties. Supreme Court nevertheless granted summary judgment to the Authority, and adhered to that determination even after, on motion for renewal, landowners submitted additional expert testimony about the extent of contamination and its impact on market value. Landowners appealed.

In reversing, the Appellate Division noted the when premises cannot be restored to pre-spill condition, landowner is entitled to damages equal to the diminution of value plus the costs of repairs. Moreover, damages include loss in market value due to the stigma of contamination, even when the contamination itself does not pose significant health risks. In this case, the court concluded that landowners had raised questions of fact both about the possibility of complete remediation and about the impact of any stigma on market value. As a result, the court held that Supreme Court had improperly granted the summary judgment motion.

 

Summary Judgment Inappropriate on Riparian Rights Claim

Mascolo v. Romaz Properties, Ltd.

NYLJ 4/24/06, p. 33, col. 6

AppDiv, Second Dept

(memorandum opinion)

In an action by riparian owners claiming ownership of a boat basin and seeking to exclude neighboring riparian owner from using the boat basin, plaintiff riparian owner appealed from Supreme Court's grant of summary judgment to the neighboring owner. The Appellate Division modified, holding that questions of fact about the origins of the boat basin precluded grant of summary judgment to either party.

Plaintiffs and defendant owns parcels abutting a boat basin that leads to Orowoc Creek. Plaintiff landowners contend that the boat basin was created artificially from land entirely within the confines of plaintiff landowners' property. Defendant landowner contends that the boat basin was created naturally and that, as a riparian owner, defendant was entitled to cross the boat basin to obtain access to the creek. The Supreme Court awarded summary judgment to defendant landowner.

In modifying, the Appellate Division emphasized that a riparian owner's right of access is qualified by the rights of the owner of submerged land over which the riparian owner must cross. Here, because the plaintiff landowners raised questions of fact about whether the defendant's property abutted a navigable body of water and about whether the boat basin was natural or man-made, the court held that summary judgment was inappropriate.

COMMENT

A riparian landowner's right of access to waterways above land of a neighboring owner includes the right to affix floating docks and the right to dredge underwater silt to maintain reasonable access. Thus, in Town of Hempstead v. Oceanside Yacht Harbor, 38 A.D.2d 263, the court held that the owner of underwater land was not entitled to collect rent from a riparian owner who operated several docks in water above neighboring owner's land. Riparian landowner owned a repair service marina on property that abutted the underwater land of neighboring plaintiff, above which he rented out dock slips to his individual boat owners. The court noted that the trial court had found that the docks did not interfere with public navigation and then held that use by the riparian owner was permitted as being necessary for its enjoyment of its riparian right of access in operating its marina. Similarly, in Town of Oyster Bay v. Commander Oil, 96 N.Y.2d 566, the court held that a landowner could dredge the accumulation of silt below the surface of the harbor in which it had riparian rights, if dredging would not interfere with the underwater landowner's rights. There, defendant oil company maintained docks above underwater land owned by the Town, which sought an injunction to prohibit the dredging. The court concluded that since the dredging was only to maintain reasonable access, and did not expand riparian owner's rights, dredging was permitted.

The rights of the riparian owner, however, do not permit the owner to create hazardous conditions for neighbors or members of the public seeking to use the abutting waterway, and do not permit the riparian owner to interfere with the existing use of underwater land. Thus, in Haher's Sodus Point Bait Shop v. Wigle, 139 A.D.2d 950, the court held that when use of riparian owner's docks interferes with public use and creates a hazardous condition, the riparian owner has no right to maintain the docks above a waterway owned by neighbor. In Haher's Sodus, pursuant to new legislation, the Village Zoning Board of Appeals denied an application by riparian owner to continue using some of its docks. The court pointed to evidence that the size of the docks caused boats to make a wide sweep around them into shallow water, creating hazardous conditions. In addition, because the docks extended so far into the water, they interfered with the riparian rights of neighboring properties. Even when the riparian owner is a municipal owner, the riparian owner may not use the waterway in a manner that interferes with safe access to the waterway by neighbors. Thus, in 627 Smith Street Corp. v. Bureau of Waste Disposal of the Department of Sanitation of the City of New York, 289 A.D.2d 472, the court held that the Sanitation Department effected a taking of its neighbor's rights, requiring compensation, when the Department maneuvered barges in a way which caused damage to its plaintiff neighbor's bulkhead and prevented the neighbor from providing safe berth for its vessels. The court concluded that since the action by the Sanitation Department effectively denied the plaintiff their riparian right of access to the waterway, the Sanitation Department was liable for inverse condemnation.