Pennsylvania Gov. Tom Wolf signed HB 863, which allows the PA’s real estate brokers, associate brokers and salespeople to provide broker price opinions. The law defines a BPO as “an estimate … that details the probable selling price of a particular parcel of real property and provides a varying level of detail about the property’s condition, market and neighborhood, and information on comparable sales.”

Brokers, associate brokers and salespeople must complete at least three hours of continuing education on BPO topics during the current or preceding two-year license period. Additionally, salespeople must have been licensed for at least three years prior to preparing BPOs and each BPO must be co-signed by their broker or associate broker. The law also outlines the minimum contents of a BPO and specifies that compensation due salespeople for a BPO be paid only to their affiliated broker.

The United States House of Representatives passed the Private Property Rights Protection Act by voice vote. It seeks to prohibit condemnations for economic development or over property that is used for economic development within seven years after that taking. It applies to state and local takings if that governmental entity receives federal economic development funds. It would also prohibit the federal government from exercising its power of eminent domain for economic development.

Many states have similar statutes. They were enacted in reaction to the Supreme Court’s Kelo decision.

The bill has been referred to the Senate for potential action.

The Circuit Court of Cook County, Illinois (Chancery Division) ruled that attorneys who referenced comparable property valuations and market values based on an income approach as part of tax appeal proceedings were simply engaged in the traditional practice of law and not in appraisal practice. In Illinois State Bar Association vs. Illinois Department of Financial and Professional Regulation, two attorneys were accused by the IDFPR of engaging in unlicensed appraisal practice after they submitted comparable property valuations, income approach information and market value opinions as part of two tax assessment appeals.

 

The main question before the court was whether an attorney representing a client in a tax proceeding violated the state’s Appraisal Act and functioned as an unlicensed appraiser when providing an analysis of comparable property valuations or developing an opinion of market value utilizing the income approach in a legal brief supporting a tax appeal. In its order granting summary judgement to the ISBA, the court stated, “There is nothing in the text and structure of the Appraisal Act that suggests that the General Assembly intended its prohibition on unlicensed appraisers to extend to what is the traditional practice of law in the property tax context.” The court further noted, “An attorney’s reference to comparable valuations in a property tax proceeding constitutes the practice of law, which is regulated exclusively by the Illinois Supreme Court.”

The Pennsylvania Supreme Court held that a Philadelphia homeowner was not entitled to attorneys’ fees under a PA consumer protection law because filing affirmative defenses doesn’t qualify as filing an “action” under the law. In Bayview Loan Servicing LLC v. Rodger Lindsay, 15 EAP 2017, in response to a foreclosure complaint, a borrower alleged that the lender violated PA’s Loan Interest and Protection Law, also known as Act 6. The lender subsequently withdrew the complaint. The borrower sought a reimbursement of his legal fees. The Court rejected that request holding that “An affirmative defense is not an action, but rather is the statement of new facts and arguments that, if true, will defeat a plaintiff’s action.”

It is clear that ride sharing has impacted the real estate community. One possible change is the value of properties near subways and bus stops. According to Bloomberg, “ride-sharing services such as Uber Technologies Inc. and Lyft Inc., and the advent of electric vehicles and driverless cars, are poised to chip away at the higher prices that real estate around subways and bus stops has earned, according to a report from MetLife Inc.’s asset-management business released. . . . All these changes would make it more attractive to develop real estate in areas that offer easy access to less congested roads but that might not be close to public transport, according to the report. People might consider migrating to the suburbs if the commute becomes easier.”

The Ohio Supreme Court on Tuesday vacated an Ohio Board of Tax Appeals decision affirming a county appraiser’s $8.8 million valuation of a Lowe’s Inc. property. The Court found, in a 4-3 decision, that new case law required reconsideration. These new cases established that comparable properties used to determine a property’s market value generally must be adjusted to reflect any lease encumbrances that might affect sale prices.

The case is Lowe’s Home Centers Inc et al., v. Washington County Board of Revision et al., slip opinion 2018-Ohio-1974, in the Supreme Court of Ohio.

The California Court of Appeal, Third Appellate District certified for publication its recent decision in Tindell v. Murphy. In that case, mortgage borrowers sued an appraiser saying they relied on his appraisal to purchase their home. The trial court had dismissed the suit because the borrowers were not intended users of the appraisal since the appraisal was prepared for the lender, and the Court of Appeal upheld that decision. A discussion of that case can be found at http://www.appraiserlawblog.com/2018/05/newly-published-california-case-helpful.html

The House Financial Services Committee recently passed legislation exempting appraisers from having to conduct evaluations in accordance with the Uniform Standards of Professional Appraisal Practice for loans under $250,000 that were held in a portfolio for three years. Appraisals are not required for loans of $250,000 or less, but federal bank regulatory policy requires lenders to obtain an evaluation to understand the collateral risk involved with the loan. HR 3221 is intended to create greater flexibility for lenders.

The PA Commonwealth Court recently held that a claim of adverse possession could be brought against a municipality when the municipality’s only use of the property during the statutory period was to hold the property for possible future sale. In City of Philadelphia v. Galdo, the City of Philadelphia obtained title to a property by condemnation in 1974. The City has not physically occupied or provided any maintenance of the Property since the late 1970s. The City filed a complaint against Galdo – the current owner of the property – for continuing trespass, permanent trespass, and ejectment, and Galdo filed a counterclaim to quiet title, claiming ownership by adverse possession.

The trial court found in favor of the City and ordered Galdo ejected from the disputed property. The trial court further determined that Galdo could not sustain a claim for adverse possession against the City because the Property was devoted to public use.

The Commonwealth Court, in a 2-1 decision, reversed the trial court finding that Galdo could bring a claim for adverse possession. The Court explained:

The City does not provide any analogous obligation imposed by law or evidence of any public use of the Property to justify holding and neglecting it for decades. Furthermore, were we to determine that a municipality that condemns and holds previously private property for possible future sale did so for a public use, we would essentially hold that municipalities could institute a taking of private property for a land bank, keeping the property until the market provides a considerable profit upon its sale. Such a holding would be detrimental to private property rights. The City is not, therefore, immune from Galdo’s counterclaim for adverse possession because it did not hold the Property pursuant to a legal obligation, or for public use.