Legal & Legislative Update – October 15, 2013

Published on: October 15, 2013

DOWNER. A prolonged Congressional stalemate that keeps government offices closed could stall home sales and derail the housing recovery, analysts have warned….Consumers weren’t exactly turning handsprings before the government shutdown, but the standoff in Washington has reduced their assessment of the economy to the lowest level in more than a year.

ENERGY INCENTIVES. Commercial real estate trade groups are urging Congress to extend the Sec.179d tax incentive for energy-efficiency upgrades to commercial buildings. That incentive ($1.80 per sq. ft.) is set to expire at the end of this year.

RETHINKING CERTIFICATION. Most rental property owners recognize the value of investing in energy-saving initiatives, but many are beginning to question the need to go through a formal “certification” process to verify the extent to which their buildings have “gone green.”

LABOR PAINS. The biggest threat to the housing recovery is not a lack of demand for homes but a shortage of the labor required to build them, a report by Fitch Ratings warns.

E-MAIL PRIVACY. Technology and Internet companies and consumer privacy advocates are supporting proposed legislation that would make it more difficult for government officials to seize e-mails.

RENTERS INSURANCE. Renters are far more satisfied with their insurance than homeowners, but far less likely to be insured. That’s according to a J.D. Powers satisfaction study, which found that while nearly half (46 percent) of renters are uninsured, renters with insurance outscored homeowners by 45 points on the price satisfaction measure.



CLOSED DOORS. “Everyone has to live someplace,” at least in theory, but registered sex offenders are finding the doors of many communities closed to them. The resulting legal challenges are raising questions about the right of convicted felons to live where they choose (subject to common statutory restrictions on proximity to schools, day care centers, and playgrounds) and the right of condominium associations to say, “Not in our back yard” or anywhere else in our community.

Those conflicting legal arguments are front and center of a law suit a registered offender (Theodore Whipple) and his wife have filed against Valley View Condominium Homeowners Association, a Texas community that refused to allow Theodore Whipple to occupy a unit the couple purchased in the development. An association rule bars registered offenders from occupying property subject to the condominium declaration that is located “within 2,000 feet of any location at which children congregate, including, but not limited to, school bus stops, parks, green belts, the Valley View Village community pool, other community common areas, and other such similar places.”

The suit, filed in Federal district court, argues that the rule is contrary to public policy, infringes on the plaintiff’s right to buy and sell property, violates his constitutional rights, unreasonably and improperly denies Whipple the right to live with his family, and fails to strike a reasonable balance between the need to protect the public and the need to permit the rehabilitation of sex offenders. Because his offense occurred more than two decades ago and because he is considered a “low-risk” offender, Whipple contends, even if the association’s rule is valid, it shouldn’t apply to him.

The association counters that:

  • The rule does not restrict Whipple’s right to purchase the property – only his right to occupy it.
  • There is no constitutional provision guaranteeing Whipple (or anyone else) the right to live anywhere they choose; and further that
  • A constitutional claim can be filed only against an entity acting “under color of state law,” and the association was acting under its rule-making authority.

Barring an out-of-court settlement, which both sides have said is unlikely, the case is scheduled to go to trial in April of next year.


WORTH QUOTING: “This was expected. It’s a bone to the market, saying we are going to continue to have an easy money supply until this economy starts to pick up steam.” ― Paul Miller, managing director with FBR Capital Markets, on the nomination of Janet Yellen to succeed Ben Bernanke as chairman of the Federal Reserve.