Water law

June 16, 2008

You probably read last week the the King County Superior Court struck down portions of the Washington State legislature’s 2003 water rights law. This was just a local reverberation of a pressing national issue, one that you will be hearing more and more about. There is a shrinking supply of water, as demand increases. The apportionment of water pits various private interests against each other and private interests andaginst public interest. It does not seem fair that we should have so little sun and still experience issues about the availability of water. But in King County homes on wells have had to be abandoned because the well runs dry. In Pierce County the there is a lot of talk about the contamination of wells by salt water.

Surprisingly (to me) this has become a partisan issue. Washington is a politically odd state in a number of different ways. Owing to the population imbalance between east and west, Washington is generally speaking progressive in political orientation. There is a wide cleft though between the sentiments of the citizens and the actions of their legislature. Perhaps because of citizen indifference, the legislature here is driven by special interests so that our laws on the whole are far from progressive.

Nonetheless it is interesting to see how water rights issues are being fought out in other states.  A number of states are attempting to expand the the public trust doctrine to include potable water from any source.  Historically this doctrine has been limited by the courts of navigable waterways, which are deemed to be held in trust for the public, giving a high degree of accountability to public officials who manage them.  Courts generally have been resistant to expanding the doctrine.  Most battles over the extension of this doctrine are now being waged in the various state legislatures.

Washington Legislature Begins Addressing Mortgage Crisis

March 7, 2008
Last night the the State Senate passed SHB 2770. (After passing through the legislature without an opposing vote it would be quie surprising if the governor did not sign this.) The original sponsors of the bill were Representatives Kenney, Lantz, Upthegrove, Conway, Morrell, Schual-Berke, McIntire, Hudgins, Simpson, Rolfes. This bill takes a very positive step to avoiding many of the mortgage-related difficulties that have beset so many home owners and gives the State Department of Financial Institutions rule making authority to address further details. It is important to remember that this bill does not cover national banks and federal institutions.

The bill imposes limits on prepayment penalties, prohibits negative amortization home loans, and makes it a felony for a mortgage broker to steer a home owner to a loan for which he or she is not qualified or for the broker to make a materially false statement. The broker is held to a strict standard of good faith.

The deed of trust act is amended to provide that the notice of foreclosure must include a notice identifying the various legitimate options available to the homeowner. (This is something that was absent from a bill I previously discussed.)

This bill addresses a portion of the foreclosure crisis. Other bills, particularly the foreclosure recovery scam legislation recommended by the Attorney General’s Office, are still pending.

Conveyance of Real Estate

February 22, 2008

The statute of frauds is an example of the path of good intentions often leading into the thicket of dispair. Washington’s statute of frauds for real estate conveyances (RCW 64.04.10) requires that any agreement to convey land be in writing and that there be a sufficient legal description of it. This was intended to prevent people from falsely claiming that they had an agreement to purchase land or that land had been given to them by oral agreement. Rigid adherence to this rule though has often achieved the opposite result. An insufficient description of the property on an earnest money agreement has allowed people, both buyers and sellers, to escape their written agreements.

In 1949 the Washington Supremem Court decided to take a hard line on this matter and follow the monority of states by declairing that any agreement to conveyland must contain a full legal description, thereby allowing people who used a street address or shorthand description to escape from their contracts.

Because legal descriptions are usually not available when contracts are signed this meant that many, if not most, contracts to buy land were avoidable by either party. Trying to avoid the obvious unfairness of this result courts with increasing frequency started applying exceptions to the statute of frauds, trying to prevent it from becoming an instrument of fraud.

The result has been confusion about whether any given contract of sale is enforceable. Real estate agents started using tax lot numbers, as these were usually more accessible than legal descriptions (which more often than not were meaningless to the parties anyway), thinking that this satisfied the statute of frauds. Recent case law however makes this practice unreliable.

Rodney Tom, a representative from Bellevue, sponsored a bill intended to alleviate the plight of real estate agents and their clients. Senate bill 6514, as amended, recently passed the senate and was sent to the state house. This bill provides that henceeforth the use of tax lot numbers, instead of the full legal description, satisfies the statute offrauds with respect to contracts to convey land.

This is an easy solution, or partial solution, to an ill-advised 59 year old decision.

Frank Chopp revisited

January 31, 2008

Frank Chopp apparently told KUOW earlier this month that he wanted to add a couple of Republicans to the Appropriations Committee. This could be an Obama-istic gesture toward conciliation and unification or Speaker Chopp does not feel that he sufficiently represents special interests in the legislature (although I’m unclear about which ones might feel slighted by him).