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It is not uncommon in farm estates for a particular child that has an interest in farming to be given an option to acquire the farmland at a particular value upon the death of the last of the parents.  Many times, these option agreements are contained in wills that were drafted years ago and set an exercise price that is much lower than current fair market land values.  That price difference can create tension between the on–farm heir and the off-farm siblings.  To make matters worse, sometimes those option agreements are only oral.  That only increases the potential for future litigation,

August 19, 2013 | Roger McEowen

An emblement is a crop growing on the leased premises, and the “doctrine of emblements” gives the tenant (or the tenant’s estate) rights to the growing crop if the land is sold or the tenant dies before the crop is harvested.  The doctrine of emblements may also be involved when the landlord dies during the term of the lease and a growing crop exists.  Entitlement to the crop is fairly clear when the landlord owns a fee simple interest in the leased land – the landlord’s heirs succeed to the landlord’s share of the crop.  However, if the landlord owns less than a fee simple interest in the

The IRS has recently released Draft Form 8960, the Form that will be used to report income subject to the NIIT effective for tax years beginning after 2012.  The NIIT applies to “passive” sources of income for individuals with modified adjusted gross income (MAGI) above a threshold amount.  The tax applies to the lesser of “net investment income” or the excess (if any) of a taxpayer’s MAGI over $200,000 for single filers and $250,000 for joint filers.  Passive or “investment” sources of income that are subject to the tax include:

Banking transactions are subject to numerous rules, both at the state and federal level. This case involves application of federal statutory law and state common law to a deal that went sour.

A common estate planning technique involves the use of a life estate coupled with a remainder. Under this arrangement, a person leaves property to someone else for life (known as the life estate holder) with the property passing to another person (known as the remainder holder) at the death of the holder of the life estate. In farm settings involving married couples, it is common to utilize a life estate for the surviving spouse with a remainder interest to the children. The surviving spouse gets the income from the farm for life and can live in the home.

In this case, an electrical company installed and relocated grain bins on the plaintiff’s property.  The defendant failed to pay the plaintiff’s bill, so the plaintiff filed a mechanic’s lien for the materials and labor furnished in the project.  The plaintiff sued to foreclose the lien and claimed that they were owed damages for breach of contract.  A mechanic’s lien is a security interest in the title to property for the benefit of those who have supplied labor or materials that improve the property.

January 22, 2008 | Roger McEowen

Iowa law provides for numerous types of liens.  For one particular type of lien, when specified services are rendered and the provider of those services is not timely paid, a lien may be asserted to secure payment.  This case involved a mechanic’s lien for unpaid plumbing services (including the cost of materials used in the job).

This case involves the transfers of farming assets among family members in an attempt to defeat a creditor’s interest.  Specifically, in 2004, the plaintiff attempted to collect a money judgment against a farmer.  The plaintiff claimed that the farmer had fraudulently transferred the 2004 crop proceeds to his wife and his father, and that the plaintiff was entitled to the proceeds of the 2004 crop.  In addition, after transferring the crop proceeds to his wife, the wife loaned the money to her father-in-law.

Iowa law contains numerous statutory liens.  One of those statutory liens – the mechanic’s lien -  was at issue in this case where the Iowa Court of Appeals was faced with the question of whether a contractor or a bank that financed the building project at issue had priority as to payment. 

Perry, Iowa, enacted an ordinance designed to give the city the power to deal with nuisances as determined by an enforcement officer. Here, the city claimed that the plaintiffs violated the ordinance due to the presence of “junked automobiles” on their property, and sent them a notice that they had 14 days to get rid of the automobiles on their own before the city eliminated them for them. The plaintiffs were not given any right to a hearing, and sued on the basis that the ordinance unconstitutionally deprived them of their constitutional right to due process.

Throughout Iowa, there is an increase in the number of cell phone towers and wind energy turbines dotting the rural landscape. Of utmost importance are the legal ramifications in regards to their construction and the challenges they present to rural landowners. In this case, the plaintiff, a landowner, challenged the construction of a cell phone tower built across the road from his home, on the basis that he was not given adequate notice of the hearing held regarding the issuance of a permit for the tower’s construction.

November 1, 2007 | Erin Herbold

In this case, a small-town resident appealed the trial court’s denial of his petition to avoid a city ordinance requiring mandatory hook-up to the city sewer system. The resident opposed the city project from the beginning, objecting in particular to the city’s right to enter onto his property for the purpose of “constructing, installing, maintaining, and monitoring the system.” 

December 3, 2007 | Erin Herbold

Annexation can sometimes be a contentious issue.  Often misunderstood, however, are the scope of the rights and powers of municipalities and other local governmental bodies involving the annexation process.  This case involved a dispute over annexation.  The plaintiff (landowner) had been trying to gain approval for installation of an on-site wastewater treatment system.  But, the local government had plans to annex the plaintiff’s property and property adjacent to it.  Accordingly, the county department of health denied the plaintiff’s permit application for the wastewater treatment system

January 3, 2008 | Erin Herbold

Inverse condemnation is a legal term that describes a situation where the government takes private property, but fails to compensate the property owner as required by the Fifth Amendment.  To be compensated, the property owner must then sue the government.  That’s why the action is called “inverse” – the order of the parties is reversed as compared to direct condemnation where the government sues a property owner to take the owner’s property.  Caselaw reveals that the taking can be either physical, deprivation of access, removal of ground support or regulatory.  Inverse condemnation is not

May 16, 2008 | Roger McEowen

Iowa law provides that local governments can collect fees and costs associated with the investigation of neglected livestock.  However, for a local government to recover, the correct procedure must be followed.  That was the point of law at issue in this case.  

July 18, 2008 | Roger McEowen

In 2007, Iowa Court of Appeals rendered an opinion in a legal battle over net metering that has been going on in Iowa for about 10 years. Now, the court has dismissed the plaintiffs' motion for a new trial in the most recent installment of the litigation.

A frequently litigated issue involves permitted business uses in areas that are zoned as residential.  Many local zoning ordinances are not specific concerning what business uses are permissible (and probably shouldn’t be specific in any event), and that fact leads to litigation over questionable uses.  Also, in many small-town zoning cases, local politics are involved.  All of these matters were involved in this case.

The Iowa Code (Iowa Code Sec. 483A.1) requires a fur-harvester’s license for the trapping of fur-bearing animals (including raccoons and badgers) and vests the Iowa Department of Natural Resources (IDNR) with the responsibility of enforcing those rules. When an individual violates these laws for the first time, they are charged with a criminal misdemeanor. Subsequent offenses are punished more harshly and may lead to a jail sentence.  

Iowa Code §414.3 governs a municipality’s power to zone and requires that zoning regulations be made within a “comprehensive plan and be designed to preserve the availability of agricultural land” and “to encourage efficient urban development patterns.” The statute also specifies sixteen elements that a city must satisfy when adopting zoning regulations, including providing notice and an opportunity to be heard in quasi-judicial proceedings. These statutory requirements were at issue in this case.  

Practically every state has a noxious weed statute requiring eradication of certain listed weeds by owners and possessors of effected land.  Many towns have also adopted similar ordinances.  In this case, the plaintiff requested an exemption from the town mowing ordinance when he planted an organic garden and indigenous grasses in his back yard. The city requested that he maintain his yard “in an appropriate manner.” The city subsequently adopted a mowing ordinance requiring property owners to keep their lawn mowed to 8 inches or under.

In the latest installment of the litigation, the Iowa Court of Appeals concluded that the Sweckers were not legally entitled to file UCC financing statements securing interests in Midland’s personal property based on the Swecker’s business relationship with Midland Power Co-op.

Iowa law requires every seller of a motor vehicle to transfer title in a commercially reasonable time. Under Iowa Code §321.45(3), offering to sell a vehicle implies that you hold good title. In this case, an individual purchased two semi-tractors at public auction from a commercial mortgage company. A representative of the company announced at the sale that the titles were guaranteed- meaning that the buyer’s funds would not be dispersed to the company until the title transfer was complete. The buyer took possession of the trucks and assumed that he would receive title within a few weeks.

In Iowa, drainage districts can be formed when there will be a public benefit. Further, Iowa Code provides that drainage of surface waters from agricultural lands shall be presumed to be a public benefit. All formations constructed for these purposes, however, must be surveyed and located along the natural watercourses or natural drainage of the land as much as is practical. Sometimes, however, a drainage district will alter the natural watercourse and increase the volume of water flowing over another’s land.

September 19, 2012 | Erika Eckley

Every Iowa resident must pay Iowa income taxes. A resident for income tax purposes can be identified in two ways. The first is through the establishment of a permanent home in the state, which involves spending about half the year living in the state.  Alternatively, a domicile is another way to prove residence. Domicile is established through the intention of the individual to permanently or indefinitely reside in Iowa whenever absent from the state.

This case presents the question of whether a nonpurchase-money mortgage that refinanced an existing mortgage and advanced new funds is subject to a surviving spouse’s dower interest under Iowa Code § 633.211. 

In this case, two banks (the plaintiff and defendant in this case) battled over priority to the proceeds from the sale of cattle. The debtor had dealings with both banks at different times, but all loans were for his cattle operation. From 2003 through 2005, the debtor, a feeder cattle and cow/calf operator, borrowed substantial funds from the plaintiff. He pledged his “farm products” as security for the loan, which included “livestock” and “cattle.” Financing statements were filed with the Iowa Secretary of State for the loans.

Rolling Hills Bank brought a breach of contract action against Mossy Creek Farms for nonpayment of five promissory notes. The notes were executed in favor of a custom cattle feeding operation that had since gone out of business. The feeding operation assigned the notes to Rolling Hills.

In this case, a dairy farmer filed a formal complaint with the Iowa Utilities Board, alleging that he was charged “significantly more” for electric service than other neighboring dairies serviced by Mid-American Energy. In a final agency decision, the Iowa Utilities Board denied the farmer’s request for a formal review and comparison of other local dairies’ utility rates.

March 1, 2011 | Erin Herbold

In 2004, the plaintiff bought a parcel of land on the edge of town and began residing in a recreational vehicle on the parcel. He contacted the local rural water association and asked to be connected to the distribution system abutting his property. The association offered to connect, but advised him that he would be responsible for the costs and materials of connection. The plaintiff next requested that the city connect his property to the city’s water and sewer systems.

June 21, 2006 | Roger McEowen

Not infrequently, agricultural landowners find themselves in boundary disputes with neighbors.  Under Iowa law, it is possible that a survey will not settle the dispute.  Indeed, in rural settings it is often the case that usage determines the actual property boundary.  That was precisely the situation in this case.  In 1868, a landowner deeded an acre to township trustees for use as a cemetery.  In 1953, a descendant of the landowner acquired title to land surrounding the cemetery.  A fence bounded the property, including the cemetery property, on the north side.  Over time, the cemetery e

March 5, 2006 | Roger McEowen

As was noted in our discussion of a January Iowa Court of Appeals opinion, boundary disputes sometimes arise in rural settings and it is possible that a survey will not settle the dispute. Instead, it is often the case that usage of the property at issue determines the actual property boundary. Another Iowa case points this rule out.

March 8, 2006 | Roger McEowen

In urban settings, restrictive covenants are utilized to order the development of lots in a particular fashion. The covenants typically “run with the land” and bind current and subsequent owners to the restrictions placed on title ownership to the property. Common restrictions are those that specify the design and location of property improvements and structures, setback requirements, garaging of vehicles and the type of animals that may be allowed on the property, if any. The idea is to maintain property values by prohibiting unsightly structures or bothersome animals, for example.

A long-standing rule is that certain types of contracts must be in writing to be enforceable. The rule is known as the “Statute of Frauds” and dates back to a 1677 enactment of the English Parliament. One type of contract that must be in writing to be enforceable is when the subject matter involves an interest in real estate.  In Iowa, a listing agreement to sell property is subject to the rule and must be in writing to be enforceable. But, what about a verbal agreement to find a buyer for a property - is that a “listing agreement” that is subject to the rule?

In some instances, a seller may forfeit the rights of a buyer under a real estate contract. Under Iowa law, a seller can forfeit the buyer’s interest if the right of forfeiture is reserved in the contract and the buyer fails to satisfy contract requirements that give the seller the right to forfeit the contract. If forfeiture occurs, the buyer loses rights in the property and the property reverts back to the seller unless the buyer corrects the breach and pays the seller’s cost of serving notice of forfeiture within 30 days of being notified of the forfeiture.

May 28, 2006 | Roger McEowen

Under Iowa law, a county may designate a road as a “minimum maintenance road.” Sometimes a county will also vacate a portion of a road in conjunction with “minimum maintenance” designation. When that happens, adjacent landowners may begin to use the roadway as their own property. If a landowner also begins using the non-vacated portion of the road as their own, questions will arise as to what action is necessary to actually vest title to the non-vacated road in the landowner.

One of the perils of owning real estate in co-ownership is the right of a co-owner to force a partition and sale. That usually happens when one or more of the co-owners wishes to liquidate their interest or wants outright ownership of a particular portion of the co-owned property. Typically, when a partition action is entered into in an ag setting, family members are involved and the proceeding is acrimonious. There are ways to eliminate the possibility of partition, such as by owning real estate in entity form, but often those steps have not been taken.

October 15, 2007 | Roger McEowen

The Iowa courts have dealt with several boundary dispute cases this year, and this is the most recent case to result in an opinion at the appellate level. Here, the defendant purchased a tract of land in 2002 that had most recently been used as a salvage yard. Prior to that, the tract housed a creamery for 100 years. The defendant fenced the property (due to insurance reasons) and began clearing the tract for a housing development. The plaintiffs purchased an adjacent tract to the north a bit more than a year later.

Under Iowa law, property titles and boundaries can be established after 10 years of usage if certain conditions are satisfied. This is known as obtaining title by adverse possession, and fixing a boundary by acquiescence, and it often arises when a tract of land changes hands. That’s what happened in this case. The parties owned two adjacent tracts. One owner used and maintained an area to the west of their home that they knew was not included in the deed to their property.

The Iowa appellate courts have decided several boundary dispute cases in recent months. These two cases can be added to the list. In the first case, the trial court determined that the plaintiff had not established a fence as a boundary line by acquiescence. That decision was affirmed on appeal. While a boundary can be established by acquiescence that has gone on for 10 years or more, the party claiming a boundary by acquiescence must prove that each of the adjoining landowners had knowledge of the asserted boundary line and consented to it.

March 1, 2007 | Roger McEowen

Historically, a buyer of a good could not sue another party on a claim that the good was defective unless the buyer had a contractual relationship with the seller. That was known as “privity of contract” and was the rule in the U.S. until a key case involving a person who purchased a new automobile from a dealer. The person was injured in an accident caused by a defect in the car and sued the manufacturer. The court ruled that the buyer could sue the manufacturer instead of being barred because of lack of contractual privity with the manufacturer.

March 12, 2007 | Roger McEowen

It is not possible to grant an easement just by word of mouth - it must be in writing. That’s because an easement is an interest in real estate and must be in writing to be enforceable. The only exceptions to this rule are when an easement is implied law (known as an easement by necessity) to allow access to a landlocked parcel, or is created by one landowner acquiescing to another party using their property for at least 10 years without stopping them (known as a prescriptive easement).

The Iowa Real Estate Disclosure Act (IRDA) requires sellers of real estate to deliver a written disclosure statement to prospective buyers. The disclosure must include certain information about the condition and important characteristics and structures on the property. But, there are exceptions to the disclosure requirement. The question in this case is whether a bank that acquires property via a deed in lieu of foreclosure, and then re-sells the property is subject to the disclosure requirement.

In Iowa, sellers of real estate must comply with the Real Estate Disclosure Act (Iowa Code Ch. 558A). The Act requires sellers to disclose certain information about the property relating to the property’s condition and important characteristics, as well as structures located on the property.    Basically, the law requires sellers to disclose any known defects in the property as well as the general condition of the property - important points that can impact the property’s value. But, must the possibility that a hog confinement facility might be constructed nearby be disclosed?

It is commonly known that earnest money is a deposit made by a buyer towards the purchase of real estate to demonstrate that the buyer is serious in wanting to complete the purchase. If the seller accepts the buyer’s offer, the earnest money is generally held in escrow until closing and is then applied to the buyer’s portion of the remaining costs associated with closing the contract. If the buyer retracts the offer, the buyer forfeits the earnest money. If the offer is rejected, the earnest money is usually returned, since no binding contract was entered into.

June 13, 2007 | Roger McEowen

A key point in real estate deals is to make sure that deed language clearly specifies the interest that is being conveyed and the parties involved. Lack of clarity can lead to litigation, even among family members. In this case, two brothers operated a farm partnership together for many years. During that time, they acquired several tracts of farmland. They acquired one of these tracts under an installment contract in 1972. Payments under the contract were completed in 1987 at which time the sellers gave a warranty deed to the brothers in their individual names.

September 3, 2007 | Erin Herbold

Here, the property owners appealed a district court decision finding that the county held a prescriptive easement across their property.  An easement by prescription is similar to the concept of adverse possession.  In Iowa,  if an individual possesses someone else’s land in an open and notorious fashion with an intent to take it away from them, such person (known as an adverse possessor) becomes the true property owner after ten years. 

September 13, 2007 | Erin Herbold

The Iowa courts have decided two more fence cases in recent weeks.  In the first case, township trustees were called to make a fence view in settlement of a dispute between two landowners. The township trustees assessed the costs of repairing the fence, apportioned costs between the parties, and determined trustee’s fees, clerk fees and set the appeal bond.  The trustees assessed $3000 in trustee’s fees and $1250 in clerk fees, of which the defendant was responsible for nearly $3000.

September 21, 2007 | Erin Herbold

The Iowa Court of Appeals has decided still another boundary dispute case. This time, the court’s opinion illustrates the peril of relying on neighborly accommodation to establish a boundary. 

October 22, 2007 | Erin Herbold

The Iowa courts have dealt with numerous cases in recent months dealing with boundaries and various rights to use property.  This case adds to the list and illustrates that land purchasers must always check for any encumbrances upon the land and understand what those encumbrances mean.  The issue is especially important when land is subdivided and sold off in lots. 
        

October 15, 2008 | Erin Herbold

A joint tenancy is signified by the right of survivorship- when a joint tenant dies, the surviving tenant (or tenants) own the property.

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