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Eight Feet Jolted a $180M Real Estate Deal
- skilled 2y agohttps://archive.is/uNYgK https://archive.is/uNYgK
- pfdietz 2y agoI think a case can be made that covenants like this should be disallowed. Sure, allow contracts to be signed, where if a condition is violated then a penalty can be paid. But here? There's no one to buy off to relax the constraint. It's held in perpetuity by the dead hand of the past. To put it another way: there's a property right here (in that setback) that is just sort of floating in the air, not owned by anyone alive. That makes it untaxable, when all sorts of other property is taxable. It should be possible for the city government to condemn that "property" and then change the covenant. They wouldn't even have to pay anyone, since there's no owner.
- bombcar 2y agoThere are procedures to strike down covenants, they just involve time and expense. Obviously the expense wasn't deemed worth it.
- pfdietz 2y agoThat's nice. It would be nicer if the time and expensive involved were zero.
- MereInterest 2y agoWhy would "zero" be the ideal price? A price of zero would mean that everybody who wants the covenant to remain in place would need to constantly be on their guard for a hypothetical overly aggressive developer who wants to change it. Having a non-zero price means that the developer can't just drag out the same argument again and again, trying to overturn the same covenant. Having minimum notice periods and public comment periods means that the developer can't just raise and force the issue in a single meeting over the holidays.
- pfdietz 2y agoIf one holds that such covenants should not exist, then any cost or difficulty to remove them is a negative.
- AnimalMuppet 2y agoI do not hold that all such covenants should not exist.
- pfdietz 2y agoThat's nice. I was speaking for me, not for you.
- bombcar 2y agoI think people may not know how many things are handled by covenants such as this. Sure, it's a position that anything like this should be a law on the books, but it's likely a not-very-popular position.
- lazyasciiart 2y agoIf most people think covenants don't affect many things, then I suspect the position that covenants should be replaced by laws is quite popular. I certainly agree with it - I've never seen a covenant that I felt should exist.
- freejazz 2y agoWow, big surprise. Poster who does not even seem to comprehend who actually owns the covenant also thinks that they shouldn't exist at all!
- zdragnar 2y agoSetbacks are part of the property that is still owned by the school. Schools don't (currently) pay property taxes in New York, but whoever buys the buildings will still owe taxes on the property, including the setback. One of the potential buyers are trying to stop the sale to a different buyer, so the setback isn't at issue. The most one could say is that the setback diminishes the potential taxable value of the property by not allowing larger buildings, but that's somewhat subjective (does the setback itself make the existing footage more desirable?).
- pfdietz 2y agoYes, I understand taxes are still owned on the property itself. But the right embodied in the covenant is another form of property that has been severed from the real property. That right has value (and this value is reflected in the reduced value of the actual property it applies to), but is not now subject to taxation.
- ghouse 2y agoIt's not severed. Still part of the real property and owned fee simple, but subject to use restrictions.
- pfdietz 2y agoYou did not understand what I wrote. I didn't say the eight foot slice was severed, I said control of the right to build on it was severed. That right is an abstract thing, but it has value, and the value is now not owned by anyone.
- zdragnar 2y agoControl over the right remains with the covenant. The city could end it if they so choose.
- Gare 2y ago> There's no one to buy off to relax the constraint. It's held in perpetuity by the dead hand of the past. It's also held indirectly by owners of other properties which sale hinged on that restriction applying to all the properties on the street.
- pfdietz 2y agoIt's this dispersed ownership I'm objecting to. Ultimately it's indistinguishable from being a citizen living in a region. We have a way of representing such collectives: the government of that region. Only here, we have a law that's effectively undemocratic.
- Gare 2y agoYeah, ideally there would be a HOA-like collective of owners that could change it if they all agreed.
- singleshot_ 2y ago[flagged]
- mminer237 2y agoThey can change it if they all agree. Just the buyers are complaining that getting them all to agree to that is "very, very hard" to do. An HOA is essentially just another covenant giving you more flexible rules to change things.
- duxup 2y agoI wonder if you could get them to agree to drop that interest?
- MereInterest 2y ago> But here? There's no one to buy off to relax the constraint. It's held in perpetuity by the dead hand of the past. I'd agree that there no one specific with whom you could re-negotiate the condition, but that doesn't mean there is "no one". It means that the negotiation must involve everybody who has made decisions based on the presence of the covenant, and who would be negatively impacted by it. As others have mentioned, there are procedures in place that could strike down a covenant. It isn't the "dead hand of the past" that is being protected. It's the current homes of the living.
- MichaelZuo 2y agoI don't think its logistically possible to negotiate with every relevant party in Brooklyn, or even within a half mile radius. It's effectively impossible to change, without resorting to the legislature, if that's a mandatory requirement.
- pc86 2y agoIf you live a half mile away are you impact at all by a setback covenant being altered? If you're a neighbor you almost certainly are.
- MichaelZuo 2y agoThis is a normal street where people walk every day for their commute, of course someone living a half mile away who uses the street can credibly claim to experience some non-zero impact with a narrower sidewalk.
- ipaddr 2y agoWhat about some who visits on Google street view?
- MichaelZuo 2y agoYou probably know more than me about this since I didn't even think of it until now.
- toast0 2y agoThere is the Rule against Perpetuities, that may apply. But it sounds the rule and its application is very complex in New York, so you'd likely need a lawyer very familiar with the specifics in New York to tell you if it applies to restrictive covenants in real estate deeds. My lay person understanding is the covenants in the 1905 deed were void for my house near San Jose, CA; but those were temperance covenants and didn't affect my daily use anyway.
- jcranmer 2y agoMy understanding of the Rule against perpetuities is that it only applies to inheritance, not general real estate transactions, so covenants can't violate the rule. (Of course, rule against perpetuities is so difficult to apply correctly that some courts have ruled it's not legal malpractice for a lawyer to screw it up.)
- lazide 2y agoNope, applies generally to deeds too. [https://en.m.wikipedia.org/wiki/Rule_against_perpetuities https://en.m.wikipedia.org/wiki/Rule_against_perpetuities]
- jcranmer 2y agoThe rule as I've generally seen stated specifically bans interests from vesting, so even if it does apply to deeds, it wouldn't cover the kind of covenant here I think.
- lazide 2y agoit’s far more than that - read the wiki. avoiding the ‘rule of dead hands’ is a major consideration. such as imposition of unchangeable rules long after death.
- mminer237 2y agoThe interests vested when the lots were first sold.
- mminer237 2y agoThere are actual owners of the property. It's held by each other the other owners of the lots. They could go to their neighbors and buy them off to sign releases of that covenant, just that's hard to get each of them to agree to do.
- waiwai933 2y agoAnyone know why the rule against perpetuities wouldn’t apply? Also, is there anyone who could meaningfully enforce this covenant? I appreciate that you wouldn’t necessarily want to risk it anyway, but just to ensure I understand the issue here.
- tzs 2y agoThe rule against perpetuities places some limitations on the creation of future interests in land. The kind of covenant in this case doesn't create a future interest.
- lmm 2y agoPresumably someone has a claim for damages if the covenant is violated, in which case they have a future interest in it. If no-one can enforce the covenant, well, it might as well not exist.
- freejazz 2y agoHave you bothered to research this at all or are you under the impression that arguing about it on HN will somehow make you right?
- drivers99 2y agoThat was anticlimactic (based on the headline, which is an editor's choice, not the author's). They knew about the requirement and followed it, no jolting involved. The setback is used for a sidewalk. Probably makes more sense for it to be public, but that's not how the man laying out the suburb decided to do it.
- alistairSH 2y agoTo be clear, this is 8’ in addition to the normal public sidewalk/right-of-way. Looking at the photo, the building in question has a wider sidewalk than the buildings on either side. In this photo, it’s the space to the right of the person in the brown jacket… https://archive.is/uNYgK/bc5622d4591c17c2ac4c1f0ff826d2331ab0c778.jpg https://archive.is/uNYgK/bc5622d4591c17c2ac4c1f0ff826d2331ab...
- drivers99 2y agoWhat about the other buildings?
- duxup 2y agoNot that there shouldn't be such restrictions in some form, but as the article mentions "It’s an agreement that was made in the past.". Makes you wonder who was involved in that agreement and if it matters now. And I wonder if this applies? https://en.wikipedia.org/wiki/Rule_against_perpetuities https://en.wikipedia.org/wiki/Rule_against_perpetuities Semi related: Who approved those signs, all caps, that spacing? https://static01.nyt.com/images/2024/04/19/multimedia/bkheights_sign_zoomedout-ghcz/bkheights_sign_zoomedout-ghcz-jumbo-v5.jpg https://static01.nyt.com/images/2024/04/19/multimedia/bkheig...
- deleted 2y ago[deleted]
- rwmj 2y agoIn the UK you can adjust or remove covenants by paying a large fee to the original covenant holder. The legal theory is that the land without the covenant would have been worth more when it was originally sold, so you pay that difference. In this case finding the original covenant holder seems like it would be tricky, but in the UK most covenants were issued by councils [local government] when council-owned housing was sold off, so you'd pay the council to adjust the covenant. Our house has a covenant against keeping farm animals which I've not felt the need to remove.
- BobaFloutist 2y agoI don't fully understand why it's so hard for a legislative body to eliminate such covenants.
- nobodyknowin 2y agoBasically yeah, it take legislation. Like the Civil rights act immediately struck down all of the racist covenants (that still exist but are unenforceable). So maybe a municipal action could do something similar? Of course the easiest way to not deal with covenants like this is don't buy property with them. Condos have tons and I will never live in one.
- function_seven 2y agoBecause constituents will often fight such an attempt. For every covenant that's annoying you, there are people in the vicinity that like it. People generally like setbacks. It prevents their neighbors from being too close, or the street getting crowded in. Property owners might want to develop along the edges, but their neighbors may not want them to. So clearing these covenants out wholesale is going to be a fight. And going through the legislative process for a single property is really inefficient.
- russellbeattie 2y agoAh, this answers a question I had: How is a covenant enforced since it's not a law? Who would have standing for a civil suit if a 200 year old covenant was simply ignored? So what you're saying is that others in the vicinity would be able sue to make sure the covenant was honored? I have to assume this has been tested in court many times before and upheld.
- IncreasePosts 2y agoProbably, someone who claims to be a pedestrian negatively affected by the lack of sunlight that was previously there.
- halestock 2y ago
- neaden 2y agoGift link: https://www.nytimes.com/interactive/2024/04/19/realestate/st-francis-college-brooklyn.html?unlocked_article_code=1.ok0.QueQ.N7EXIVFf3NTP&smid=url-share https://www.nytimes.com/interactive/2024/04/19/realestate/st...
- crazygringo 2y agoFirst of all, the headline is pretty clickbaity -- from the article it seems quite clear that this was a case of competing buyers, and the 8-foot setback is some spurious justification for why one of the buyers didn't move fast enough. Second, many commenters here are arguing that perpetual clauses like this ought to be disallowed. It certainly makes sense to me that clauses like these ought to be converted to regular zoning laws that the city can then adjust as future generations deem necessary. But third, this particular clause makes sense! You wouldn't want to get rid of it. All the buildings on the block have façades that are aligned with each other, to form a continuous "wall" of buildings. The last thing you want is for some random property owner to get to jut out 8 feet in front of all the other buildings. Ensuring some minimal level of architectural consistency on a dense city block is a good thing. So keep the eight-foot setback. It makes perfect sense. But just convert it to be a city zoning regulation. It should be decided and modified if necessary via democratic means, not private contract.
- pc86 2y agoDoesn't your argument that this should be converting to a zoning regulate kind of negate your point that we should want to ensure some level of consistency on a dense city block?
- crazygringo 2y agoNo, the point is that the zoning maintains the consistency. But that if someday in the future there's a greater public need for something that outweights the architectural consistency, there's the flexibility to consider that too, through the existing public mechanisms of zoning changes. Like if the entire block gets purchased and torn down to put in a single school building, then the setback is no longer needed, because a new kind of consistency can take its place.
- deleted 2y ago[deleted]
- rootusrootus 2y ago
- nicole_express 2y agoNot sure why everyone is desperate in these replies to eliminate the setback; seems like a perfectly good outcome to have a wide sidewalk in an area that is likely to have a lot of pedestrian traffic.
- mannyv 2y agoOne question is: if you build on the easement who is going to sue you? The public? The city? Who's going to bother? Or is the issue that it'll come up in the title search and you won't be able to get title insurance, which will cause problem with the loan? In any case deed restrictions get invalidated all the time. The racist ones are null and void, for example.