January 2, 2015
Reiss on Real Estate Cases To Watch In 2015
Law360 quoted me in Real Estate Cases To Watch In 2015 (behind a paywall). It reads, in part,
As the real estate deals market has heated up, so have litigation dockets. And several cases with national or regional importance for developers and lenders on foreclosure practices, land use rights and housing finance reform are primed to see major developments in 2015, experts say.
A number of real estate cases wending their way through the court system – from state appeals courts to the U.S. Supreme Court – could affect how apartment owners, developers and lenders do business. And with the real estate market heating up, experts are also expecting a new wave of litigation to pop up in connection with an increasing pipeline of public-private partnership projects.
The cases are as varied as a high court suit that could throw open an avenue of Fair Housing Act litigation and a New Jersey matter that could give developers leverage to push forward on blocked projects. Here are a few cases and trends to watch in 2015:
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Hedge fund Fairholme Capital Management LLC’s challenge to the government’s directing all the profits from Fannie Mae and Freddie Mac toward the U.S. Department of the Treasury has been closely watched for more than a year, and it is expected to come to a head in 2015.
The company alleges the government acted unconstitutionally when it altered its bailout deal for the government-sponsored enterprises to keep the companies’ profits for itself.
“If the plaintiffs win, it could have a dramatic impact on how housing finance reform plays out,” said David Reiss, a professor at Brooklyn Law School. “And even if they don’t win, the case can have a negative impact on housing finance reform if it casts a cloud over the whole project.”
Shareholders lost a related case in the D.C. district court, “but if they win the Fairholme case, things will get complicated,” Reiss said.
The case is Fairholme Funds Inc. v. U.S., case number 13-cv-00465, in the U.S. Court of Federal Claims.
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