The real estate industry is among the most litigated sectors. The coming year will be no exception as a number of legal issues will be resolved in courts.
In New York, for example, Governor Kathy Hochul recently announced a proposal to fix problems with housing supply. Her proposal is to change laws that regulate the density of housing.
The current law in New York limits the floor area ratio of a dwelling to 12. The city of New York wants greater autonomy to address issues of housing density. It’s something of a controversial issue because some believe density is a safety issue while some landlords argue that allowing more people to live in smaller spaces is better for their bottom lines.
Expect this to be an issue in New York and other parts of the United States.
Observers are watching a new case in Virginia that pertains to members of the military.
A new Virginia law would expand the state’s prohibition on discrimination against military members in residential areas.
The Virginia Legislature is considering a law that adds “military status” as a group protected by the Virginia Fair Housing Law. This law currently only protects veterans. The new law would include a larger class of military members, such as active-duty personnel.
Another real estate issue that will be litigated in 2022 is the Force Majeure Clause. Force Majeure is a term that means “an event or effect that cannot be reasonably be foreseen or controlled.”
The way it works in real estate is the Force Majeure can be used to excuse the meeting of an obligation by a particular party when that party is prevented from its obligated action because of unforeseeable circumstances. It must be something that is obviously outside the control of the obligated party. In other words, it is an “act of God.”
COVID-19 has become a major factor in this regard. Because of the many complications produced by the pandemic, many landlords had trouble completing projects they were obligated to do, such as implementing structural upgrades to their properties and for the benefit of their tenants. Things like labor shortages and supply chain disruptions are examples of roadblocks faced by landlords.
Force Majeure has become a big issue in the COVID era. Thus, this will be the subject of many real estate cases in the courts for 2022.