Delaware Real Estate Law Update
August 5, 2010
Publication| Real Estate Services
Changes for Leasehold Mortgages
On July 23, 2010, Governor Markell signed into law a bill that clarifies a long-standing ambiguity in Delaware law regarding leasehold mortgages. While Delaware law has long allowed the mortgaging of a leasehold where the term of the lease is 10 years or more, it was unsettled whether the 10-year requirement applied to the original term of the lease as of the date it was entered into or the remaining balance of the term at the time of the leasehold mortgage transaction.
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Delaware Prohibits Private Transfer Fees
On July 27, 2010, Governor Markell signed into law Senate Bill 322 prohibiting the charging of so-called private transfer fees on the transfer of real property. Delaware now joins many other states in the movement to prohibit these fees. The legislation prohibits the enforcement of a fee to be paid at the time of transfer of real property to allow such a transfer. These are fees that are unrelated to services or other consideration received in return for the payment, but are due solely for the right to transfer the property.
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Homeowners’ Association Authority to Regulate Demolition
The Delaware Court of Chancery has recently held that where a restrictive covenant requires homeowners’ association approval of changes or alterations to buildings in a development, such approval is not required for a homeowner to demolish the homeowner’s house where no replacement structure is planned. Service Corp. of Westover Hills v. Guzzetta, 2009 Del. LEXIS 221 (Del. Ch. Dec. 22, 2009).
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