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Eight Feet Jolted a $180M Real Estate Deal

nytimes.com

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Re: Eight Feet Jolted a $180M Real Estate Deal

#31

Post by pfdietz »

ghouse wrote: post #28
pfdietz wrote: post #12

Earlier quoted context omitted.

Yes, 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.

It's not severed. Still part of the real property and owned fee simple, but subject to use restrictions.

You 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.

Re: Eight Feet Jolted a $180M Real Estate Deal

#32

Post by tzs »

waiwai933 wrote: post #4

Anyone 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.

The 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.

Re: Eight Feet Jolted a $180M Real Estate Deal

#33

Post by IncreasePosts »

russellbeattie wrote: post #26
function_seven wrote: post #19

Earlier quoted context omitted.

Because 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.…

Ah, 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.

Probably, someone who claims to be a pedestrian negatively affected by the lack of sunlight that was previously there.

Re: Eight Feet Jolted a $180M Real Estate Deal

#34

Post by halestock »

russellbeattie wrote: post #26
function_seven wrote: post #19

Earlier quoted context omitted.

Because 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.…

Ah, 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.

I would imagine neighbors would have standing to sue for since it might affect their view or property values or something of that nature.

Re: Eight Feet Jolted a $180M Real Estate Deal

#35

Post by freejazz »

pfdietz wrote: post #20
MereInterest wrote: post #16

Earlier quoted context omitted.

Why 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 co…

If one holds that such covenants should not exist, then any cost or difficulty to remove them is a negative.

Wow, big surprise. Poster who does not even seem to comprehend who actually owns the covenant also thinks that they shouldn't exist at all!

Re: Eight Feet Jolted a $180M Real Estate Deal

#36

Post by crazygringo »

First 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.

Re: Eight Feet Jolted a $180M Real Estate Deal

#37

Post by MichaelZuo »

MereInterest wrote: post #15
pfdietz wrote: post #3

I 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 a…

> 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 men…

I 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.

Re: Eight Feet Jolted a $180M Real Estate Deal

#38

Post by pc86 »

crazygringo wrote: post #36

First 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 regula…

Doesn'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?

Re: Eight Feet Jolted a $180M Real Estate Deal

#39

Post by pc86 »

MichaelZuo wrote: post #37
MereInterest wrote: post #15

Earlier quoted context omitted.

> 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 men…

I 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.

If 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.

Re: Eight Feet Jolted a $180M Real Estate Deal

#40

Post by rootusrootus »

crazygringo wrote: post #36

First 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 regula…

> All the buildings on the block have façades that are aligned with each other

What's interesting here is that in the picture they provide to document the 8 foot setback, the reason the buildings do not align with each other is because of that. Other buildings on the block go right up to the sidwalk.

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