[Continued from yesterday’s Part 1.]
By: David A. Smith
When I awoke this morning
Dove beneath my floating home
– Crosby Stills and Nash, Lee Shore
Yesterday’s post introduced us to combative Fane Lozman, whose quest to have its houseboat declared real estate, even after its demolition as a waterborne vessel, has now reached the U. S. Supreme Court, and as such as shown by a recent Miami Herald (March 25, 2012) article, the stakes are high:
Rebel without a causeway: Fane Lozman
With the world’s increasing urbanization (and urbanization’s dependence on technology for infrastructure), our increased demand for living adjacent to bodies of water (warm, wet, and west),and the increased modularity of technological housing, more and more we’re going to be living in waterworld cities that are mobile technological constructs, and having to answer factual questions such as Is a barge real estate?
You can live in it, but it’s not real estate
The vessel definition is crucially important to not only people who live on the water but also to major commercial businesses such as floating casinos, hotels and restaurants, said Stanford University law professor Jeffrey Fisher.
Fishing for a definition
The outcome will determine whether federal maritime or state laws apply to structures that are moored, more or less permanently, in one place.
To my way of thinking, the key is permanence. As with mobile homes, if it can be readily wheeled away, then it is chattel, but once it is fixed in place, and loses its mobility, then it is real estate.
Well, it’s real estate now
For example, owners of floating homes usually must pay property taxes, while those owning vessels under maritime law do not.
This definition is also a practical one, since real estate is consumed with land-use issues and property that is mobile isn’t consuming land in the same way.
Coast Guard regulations require certain levels of crew for vessels. The standards differ on what kinds and amounts of damages can be awarded in personal injury lawsuits. There are different rules aboard vessels for employment disputes and compensation for workers injured on the job.
The more nations extend their territorial rights farther in the ocean, the more we can expect local and even national governments seeking to tax property that swims into their domains and then settles down.
Owners of vessels and floating structures across the U.S. are closely watching the case so they know which set of laws to follow.
Real estate if the tide stays permanently out, otherwise a vessel
Conversely, given the value of waterfront property, it won’t be many years before we see more developments of land created from the ocean (like Dubai’s World or its Palm) or of property sold atop a superstructure made of materials other than fill.
There’s another isle a days’ run away from here
It’s empty and free
Just as the oceans go everywhere, so do boats and maritime law, unlike real estate, which is particular and local.
“The most overarching concern in maritime law on the planet is uniformity,” said David Weil, a maritime attorney in Long Beach, Calif., who isn’t involved in Lozman’s case. “It’s extremely important that shipping interests have uniform treatment as they go from port to port.”
Two federal appeals courts have ruled the owner’s intent is key to determining whether a structure is a vessel.
A building that floated … until Katrina
That’s a bad determinant. Aside from giving the owner a fielder’s choice to choose favorably for himself and adversely for government, how do you determine intent?
Can you determine his intentions?
In Lozman’s case, however, the 11th U.S. Circuit Court of Appeals held that what mattered most was if a structure was “practically capable of transportation over water,” which closely tracks the language in federal law that dates to the 1870s.
Yes, I think that’s right.
Riviera Beach officials declined comment because of the pending legal case. But in documents urging the Supreme Court not to take the case, they insisted the structure was not similar to a land-based home that would be afforded important state law protections against seizure.
Once property becomes immobile, its owners lose their normal right of removal or flight.
That only applies on land
so real estate property owners are granted legal rights and protections unavailable to chattel owners – and their property is sold differently as well.
Down below her graceful side
In the turning tide
Now, under the law, any given structure needs to be one or the other, not both.
Just one, please, not both
Yet Lozman’s home had no engines, no bilge pumps, no steering mechanism, no lights or
navigation aids. It had to be towed wherever it went.
As far as I can tell, however, Mr. Lozman paid no property taxes on it, so he was content for it to be considered invisible to the assessor – and, for that matter, to the marine authorities.
It had no Florida vessel registration number.
You’re not legal unless you have one of these.
All it did was float.
Mr. Lozman thus had a unique asset, one that was of neither legal type. It was, in short, informal housing, a floating gecekondu.
Sunset smells of dinner
Women are calling at me to end my tales
When discovered, he hopped off the legal fence he was straddling, and suddenly discovered that he was real estate all along.
Whaddaya mean, I’ve got to choose?
“It was a very unseaworthy craft,” Lozman said, adding the appeal of living there was the immediate access to his speedboats and other pleasure watercraft.
That Mr. Lozman also had actual boats suggests he saw this as real estate, not watercraft.
Yet a Florida federal judge and the 11th Circuit judges determined the structure was, in fact, a vessel, in part because it had been towed several times to different marinas across hundreds of miles.
That doesn’t impress me – houses can be moved.
Was it real estate while it was moving, I wonder?
Conversely, some watercraft have no power source and instead rely on tides, currents, or muscle power.
Not sailed so much as blown and drifting
The case is Fane Lozman v. The City of Riviera Beach, Florida. No. 11-626.
The remains of Mr. Lozman’s floating home
The Supreme Court agreed to take the case earlier this year and is expected to hear arguments in October.
Keep your eye on this one – Mr. Lozman and the City of Riviera Beach may each have narrow perspectives, but the amicus briefs are likely to be numerous, lengthy, and impassioned.
But perhaps I’ll see you the next quiet place
I furl my sails
And for my next quest …
