S.F. COUPLE AWARDED $2.7 MILLION AFTER BEING HARASSED BY LANDLORD
A California Court of Appeals recently upheld a judgment in the amount of $2.7 million against a San Francisco landlord sued for abusing tenants.
In Duncan v. Zoriall LLC, Plaintiffs, Tenants, alleged that their former landlord, Anne Kihagi and Christina Mwangi harassed and abused them. A jury awarded them damages totaling $3,528,000. The trial judge reduced the award to $2.7 million. The landlords appealed the decision. A California Appellate Court affirmed.
This decision should not be taken lightly. There has been a significant increase in lawsuits against real estate agents by tenants in San Francisco. San Francisco juries have a tendency to be liberal with their awards, particularly, when they were outraged by conduct. It should be noted that in this case, the damages were tripled under San Francisco rent control laws.
COURT FINDS CONDOMINIUM OWNER EXEMPT FROM SUBSEQUENT BAN ON SHORT TERM RENTALS
In Brown v. Montage at Missions Hills, Inc., a California Appellate Court recently held that a common interest development ban on short term rentals does not apply to owners who purchased their properties prior to enactment of the ban. Plaintiff purchased a condominium in the Montage Development in 2002. For approximately fifteen (15) years, she used the property for short term rentals. In January 2018, Montage amended its governing documents to prohibit its members from renting their properties for short term rentals. Plaintiff filed suit. She argued that the restriction does not apply to her, because she purchased her property before the enactment.
The trial court granted summary judgment in favor of Montage. A court of appeal reversed holding that Plaintiff, as a prior purchaser, was exempt from the restriction.
City Retains Ability to Reject Short-Term Rentals
In Homeaway.com, Inc. v. City of Santa Monica, the Ninth Circuit Court of Appeals affirmed the dismissal of plaintiff’s complaint that Santa Monica improperly restricted short-term home rentals. In Homeaway, the City of Santa Monica passed an ordinance regulating short-term vacation rentals by authorizing short-term “home sharing” rentals, where owners could remain at the property with guests, but prohibited all other home rentals of 30 consecutive days or less. Homeaway.com and Air B&B filed suit, alleging that the City ordinance was preempted by the Communications Decency Act of 1996 (“CDA”) and the First Amendment. The District Court denied a preliminary injunction and dismissed the complaints. The Ninth Circuit affirmed. Read More...
Owner of Property Held Liable to Subcontractor's Employees for Injury at the Premises
In Sandoval v. Qualcomm, Inc., a California appellate court held that an owner could be held liable to a subcontractor’s employee for injuries arising out of a dangerous condition. In Sandoval, the plaintiff was severely burned in an “arc flash” from a live circuit breaker while working at a plant owned by Qualcomm, Inc. Plaintiff’s employer did not have worker’s compensation coverage. Plaintiff sued his employer, the general contractor and Qualcomm for his injuries. Read More...
Jury Awards 7.5 Million Dollars Against HOA for Injury in a Hot Tub
Recently, a Florida jury awarded an owner more than $7.5 million for injuries affiliated with a defective hot tub. In that case, the plaintiff began entering the hot tub, which was controlled and maintained by his homeowners association (“HOA”). When he stepped into the hot tub, he was startled to see that it was partially drained. Read More...
Both United States and California Supreme Courts Refuse to Hear California Beach Taking Case
We have been following Martin’s Beach I, LLC v. Surfrider Foundation (Docket No. 17-119), a California case involving the closure of a beach in Northern California. In Martin’s Beach, a billionaire purchased an 89-acre property known as Martin’s Beach. The property included his access to a beach, which had been previously used by the public for a nominal fee. After his purchase, the owner closed the beach and hired security guards to prevent the public from accessing or using the property to access the beach. Read More...
Question and Answer Regarding Lease Option Payment
Question: I drafted a lease, option and purchase agreement. Is the option payment non-refundable or should the option money stay in escrow pending removal of the contingencies by the buyer? Read More...
NAR Adopts New Rule Requiring a Response by a Listing Agent to an Offer
The National Association of Realtors has amended NAR Code of Ethics, Standard of Practice 1-7. Effective January 1, 2019, a listing broker or agent will be required to respond in writing to an offer, which was submitted to the seller, if the cooperating broker requests such response. Read More...
Court Holds That an Arbitrator Did Not Have Authority to Bind a Non-Signatory to the Arbitration
In Benaroya v. Willis, an arbitrator from JAMS recently joined a non-signatory to an Arbitration Agreement and found against him. A California Court of Appeals reversed that decision.
In Benaroya, Benaroya is a movie company, which contracted with West Side Corporation to pay Bruce Willis, the President of West Side, to perform in a movie being produced by Benaroya. A dispute arose regarding Willis' payment and Willis and West Side commenced arbitration proceedings against Benaroya pursuant to an arbitration agreement. Willis and West Side then moved to amend their arbitration demand to name Michael Benaroya, individually, even though he was not a party to the agreement on the grounds that he was Benaroya's alter ego. The arbitrator granted the request finding that Benaroya was the alter ego of his company. The arbitrator found in favor of Willis against Benaroya. Read More...
Jury Finds in Favor of Coldwell Banker in Horiike
We previously reported on Horiike v. Coldwell Banker. In that case, Mr. Horiike, alleged that the Coldwell Banker listing agent of a property he purchased failed to adequately disclose the square footage of the home he purchased in Malibu, California. The jury in the original case found in favor of Coldwell Banker. Mr. Horiike filed an appeal alleging that where there is dual agency broker, even if there are different agents, a fiduciary duty is created. Read More...
Law Group Wins Appeal on Behalf of Brokerage
Recently, one of our clients was sued by a locksmith, who was shot during an eviction where our client's agent was present. The locksmith sued the owner, brokerage and all other involved parties. The Law Group filed a demurrer on behalf of the brokerage on the grounds that the brokerage owed no duties to the locksmith. Read More...
Appellate Court Holds That Property Owner Had No Right to Keep Tigers at Her Home
In Hauser v. Ventura County Board of Supervisors, Hauser applied for a conditional use permit to allow her to keep five (5) tigers on her nineteen (19) acre property. The County rejected that application finding that allowing the tigers would be unsafe to the community. Hauser’s property was located within a half mile of fifty-seven (57) residential lots, twenty-eight (28) of which had residences on them. There were forty-six (46) homes within a mile of the property and two (2) children’s camps within two (2) to three (3) miles of the project. Hauser argued that she took safety precautions, including an eight (8) day class on animal husbandry, safety and training. Read More...
Law Office Obtains Arbitration Decision in Client's Favor
Recently, a real estate brokerage asserted a claim to a commission against one of our clients. There were discrepancies in the brokerage’s listing contracts. For example, there were two (2) listing agreements, one had the box marked to submit a list of buyers with whom the agent had worked as an exemption to any new listing agreements. A second agreement had the box marked, but no termination date. Both agreements were terminated by the seller. Read More...
Court Allows Assignee of Deed of Trust to Sue the Title Company for Improperly Releasing a Deed of Trust
In SMS Financial XXIII, LLC v. Cornerstorne Title Company, a California appellate court held that the assignee of a promissory note and deed of trust may assert an action against the title company for the improper release of a deed of trust. In SMS Financial, U.S. Bank made a business loan secured by a deed of trust. That note was assigned to plaintiff, SMS. Three (3) years later, the borrower defaulted and SMS began foreclosure on the deed of trust. It then discovered that U.S. Bank and the title company had improperly released the obligation on the deed of trust in 2007. Read More...
Court Holds That the Order of Recording Does Not Establish Priority
In MTC Financial, Inc. v. Nationstar Mortgage, a California appellate court recently held that the order of indexing two (2) simultaneously recorded deeds of trust against the same parcel of property was not determinative of priority. In MTC, a borrower obtained two (2) loans from Countrywide Home Loans, Inc. One was a primary loan and the other was a home equity line of credit. Both deeds of trust were recorded with the recorder’s office. The deed of trust for the equity line was recorded first. Subsequently, there was a foreclosure sale and a dispute between the lenders as to priority. Read More...
SBJLG Successfully Obtains Closure of CalBRE Inquiry Against Listing Agent
Recently, two (2) buyers purchased vacant land from a seller without investigating the property’s development potential prior to the close of escrow. The buyers performed their investigation after the close of escrow, and determined that the land, which does not have sewer access, lacks the sloping required to house a septic system, essentially, rendering the property undevelopable for residential purposes. The buyers then filed a complaint against the listing agent with the Bureau of Real Estate (“CalBRE”). Read More...
Bankruptcy Court Holds Real Estate Commissions Belong to the Bankruptcy Estate
In Re Anderson, the U.S. Bankruptcy Court awarded commissions from thirteen (13) transactions to the Trustee of real estate agent’s bankruptcy estate. In Anderson, debtors, Steven and Melanie Anderson were licensed real estate agents. They filed a Chapter 7 Bankruptcy petition. As of the filing of the petition, they had thirteen (13) real estate transactions in escrow, which had not yet closed. Read More ...
Court Holds Sellers of a Vineyard Cannont Be Liable For Nondisclosure Without Actual or Constructive Knowledge of Defects
In RSB Vineyards, LLC v. Bernard A. Orsi, et al., a California appellate court held that sellers of a vineyard could not be held liable for the failure to disclose alleged defects in the absence of actual or constructive knowledge of the defects.
The sellers originally purchased the property and converted the building from a single family home to a wine tasting room. The sellers hired an architect to design a remodel and applied for a commercial use permit. The use permit was issued and the County of Sonoma approved the design plans for the remodel. The construction was performed by a licensed contractor and inspected and approved by County officials. The sellers received a final certificate of occupancy for the winery/tasting room. Read More ...
Court Holds that Mortgage Lender Does Not Have to Honor Tenants’ Obligations Under a Lease After a Foreclosure
In BRE DDR BR Whittwood CA LLC v. Farmers and Merchants Bank of Long Beach, a California appellate court held that where a commercial tenant defaulted on a loan secured by his lease, the lender who foreclosed and took possession of the premises, was not bound by the tenants’ right to remain in possession for the full term of the lease. In BRE, a tenant entered a 15 year lease for restaurant space in a shopping center. The tenant recorded a memorandum of lease with the County Recorder’s Office. Read More ...
Court Holds Attorney’s Fees Are Not Available to HOA Under the David-Stirling Act
In Retzloff v. Multan Parkway Residents Association, plaintiff and others sued their homeowners association for alleged violations of the Davis-Stirling Common Interest Development Act (“Davis-Stirling Act”). The Association filed a demurrer, which was sustained without leave to amend. The court concluded that the action was frivolous and awarded the association its attorney’s fees and costs pursuant to the Davis-Stirling Act. Plaintiffs appealed. Read More...
Court Holds Tenants Are Entitled to a Jury Trial on Their Breach of Warranty of Habitability Claim
In Guttman v Chiazor, the appellate division of Los Angeles Superior Court recently held that tenants in an unlawful detainer action had a right to a jury trial on their claim of breach of the warranty of habitability. In Guttman, the defendants’ tenants failed to pay rent and the landlord sued. In response, the tenants asserted the affirmative defense of the breach of warranty of habitability. The trial court found no right to a jury trial. Read More...
Appellate Court Holds That Complying With, and Performing Work, Allowed by a Land Use Permit Prior to Resolution of Administrative Mandate Proceedings Forfeits the Permittee’s Objections to the Permit’s Conditions
In Lynch, et al. v. California Coastal Commission, the homes of two (2) California property owners had been protected by a shared seawall and midbluff erosion control structure since 1986. A shared stairway provided the only access from the blufftop to the beach below. After winter storms significantly damaged the seawall, most of the midbluff structure, and the lower portion of the stairway, the property owners sought a coastal development permit from the California Coastal Commission (“Commission”) to demolish the old structure, construct a new tied-back seawall across both properties, and rebuild the lower stairway. The Commission ultimately approved the coastal development permit allowing for the seawall demolition and reconstruction, as well as midbluff geogrid protection. Read More...
Appellate Court Holds Real Estate Broker Not Liable for Failing to Protect a Potential Purchaser from Dangers Affiliated with an Empty Swimming Pool
In Jacobs v. Coldwell Banker Residential Brokerage Company, a California Appellate Court held that a real estate broker may not be held liable for negligence for failing to protect a potential purchaser from dangers affiliated with an empty swimming pool or diving board. In Jacobs, Coldwell Banker marketed a vacant home for sale. The backyard was fenced and contained an empty swimming pool and diving board. Before listing the property, the Coldwell Banker agent visually inspected the property, including the pool and the diving board. Read More...
Court Permits CalBRE to Post an Agent’s Convictions, Even Though the Convictions Were Dismissed
In Skulason v. California Bureau of Real Estate, a California Appellate Court recently held that the California Bureau of Real Estate ("CalBRE") had no mandatory duty to remove from its website publicly available information about a real estate licensee's convictions, including convictions that were subsequently, dismissed. In Skulason, licensee Brenda Skulason, sued CalBRE claiming that it had improperly refused to remove from its public website a document revealing that she had been previously convicted of three (3) misdemeanors. Read More...
Legal Issues Arising Out of Use of Security Cameras
Many homeowners are using security cameras to enhance the security of their property. Cameras may be located on the interior or exterior of the property. Some cameras are solely visual, while others pick up sound. Legal issues have arisen relating to the use of these cameras. For example, a buyer buying a home may make a derogatory comment about the home to their real estate agent, which is picked up by the security camera and subsequently, heard by the sellers. When the sellers express anxiety or anger, buyers have been raising issues relating to their rights of privacy. Alternatively, landlords who place security cameras in their homes or on the exterior, have faced claims by tenants for an invasion of privacy. Read More...
Question and Answer Regarding Whether Emails Create a Binding Contract
Question: Can emails create a binding contract?
Answer: Recently, an appellate court in New York held that emails between a buyer and seller may constitute a formal binding contract. In Stonehill Capital Management v. Bank of the West 28 NY3D 439, 2016, an appellate court upheld a contract entered into by parties when the seller "agreed" to accepted the option bidders bid in an email that set forth all the material terms of the deal, including the sales price, specific loan to be sold, timing of the closing and manner of payment and wire transfer information. Read More...
Appellate Court Allows Borrower to Pursue Claim Against Lender Arising Out of a Denial of a Loan Modification
In Berman v. HSBC Bank, USA, N.A., a California Appellate Court recently reversed the dismissal of a claim against a lender arising out of a denial of a loan modification. In Berman, plaintiff applied for a loan modification with defendant, his lender. Defendant denied the application, but advised him in a letter that he had fifteen (15) days to appeal the denial. Under the law, however, plaintiff had thirty (30) days to appeal. Plaintiff sued the lender for injunctive relief on the theory that the denial letter was a material violation of the Civil Code because of the misrepresentation regarding the time to appeal. Read More...
Court Finds City’s Designation of Historical Property Appropriate
In Young v. City of Coronado, a California Appellate Court recently held that a city’s findings were sufficient to support a conclusion that a privately owned building merited protection as a historical building. In Young, plaintiffs requested a permit to demolish a small cottage on real property in Coronado, California. Because the cottage was more than seventy-five (75) years old, the Coronado Historic Resource Commission reviewed the property for potential historical significance. The Commission concluded that the dwelling should be designated as a historical resource under the local Code. Read More...
Consumer Finance Protection Bureau Fines Mortgage Company and Real Estate Brokerages for Violations of RESPA Arising Out of Market Service Agreements
Recently, the Consumer Finance Protection Bureau (“CFPB”) fined Prospect Mortgage $3,500,000 and two (2) real estate brokerages $230,000 for violations of RESPA arising out of the use of Market Service Agreements (“MSAs”). Read More...
Court Voids Deed of Bona Fide Purchaser Based on Fraud
In OC Interior Services, LLC v. Nationstar Mortgage, LLC, a California appellate court recently declined to enforce a deed based on fraud. In OC Interior Services, Roger Hart purchased certain real property and obtained a loan to purchase it. Without notice to his lender, he filed a complaint in court to cancel the loan claiming that he had paid the loan in full and legally rescinded the loan by providing notice of rescission to the lender. Read More...
Court Holds That a Purchaser of Real Property at a Foreclosure Sale is Not Required to Record Its Title Prior to Serving Occupants With a Notice to Quit
In Dr. Leevil, LLC v. Westlake Health Care Center, a California appellate court held that a purchaser of real property at a foreclosure sale is not required to record title prior to serving occupants with a notice to quit. In Dr. Leevil, the owners of certain commercial property defaulted on their loan secured by a deed of trust. The lender initiated foreclosure proceedings. Read More...
Court Prohibits Landlord From Collecting Section 8 Payment From Tenant or Evicting Tenant Where the Premises Did Not Pass Inspections
In Scott v. Kaiuum, an Appellate Division of the Fresno Superior Court held that a landlord who forfeited Section 8 payments for the failure to maintain the premises, may not collect those payments from the tenant nor evict the tenant for nonpayment. In Scott, plaintiff entered into a one-year rental lease with defendant landlord. Part of the rental payment was paid through the Fresno County Housing Authority pursuant to Section 8 regulations. Read More...
Court Allows Broker to Pursue a Claim Against Non-Signatories to a Listing Agreement
In Jacobs v. Locatelli, a California appellate court allowed a broker to present evidence to support her claim that the person with whom she contracted to list the property on behalf of other parties was appropriate. In Jacobs, plaintiff, a real estate agent, entered into an exclusive listing for a parcel of real property. The listing agreement provided that the property owner was Locatelli, Trustee of the Locatelli Trust. Read More...
Court Allows Statutory Damages for Trespass to Trees
In Fulle v. Kanani, plaintiff and defendant shared a property line. The defendant retained a tree service to cut down limbs and branches of six (6) trees located on plaintiff’s property that partially blocked defendant’s view. Defendant did not obtain permission prior to the tree trimming. Plaintiff filed a complaint against defendant for trespass and negligence. Read More...
Court Holds that Homeowners Could Not Assert Adverse Possession Claim to Homeowners Association Property Absent Payment of Property Taxes on Disputed Area
In Nellie Gail Ranch Owners Association v. McMullin, et al., the court found that a homeowner in a homeowners association could not maintain an adverse possession claim absent payment of property taxes or evidence showing that no taxes were assessed against the disputed land. Nellie Gail Ranch is a planned development in Laguna Hills, California. Nellie Gail Ranch Owners Association (“Nellie Gail”) is the homeowners association that owned the common areas and administered the community’s CC&R’s. Read More...
Court Prohibits Three (3) Day Notice on Unpermitted Residential Unit
In North 7th Street Associates v. Constante, the Appellate Division of the Los Angeles Superior Court recently held that a three (3) day notice to pay or quit could not be used to initiate an unlawful detainer action on an unpermitted property where rent could not lawfully be collected. In this case, plaintiff owned a residential unit and rented it to the defendant. When the defendant failed to pay rent, plaintiff served him with a three (3) day notice to pay or quit. Read More...
Court Requires Homeowners Seeking Damages for Construction Defects to Comply with the Right to Repair Act
In Elliott Homes, Inc. v. Superior Court (Hicks), a California appellate court recently held that homeowners seeking damages for construction defects were required to comply with the prelitigation procedures set forth in the Right to Repair Act (“Act”), even though the homeowners did not sue based on the statute. Read More...
Criminal Court Orders Unlicensed Contractor to Return All Amounts Paid to Him
In People v. Walker, an Appellate Division of the Los Angeles County Superior Court held that a homeowner victimized by an unlicensed contractor was entitled to a refund of the full amount of monies paid to him, even if the work was beneficial to her. In Walker, a homeowner hired Walker to perform services at her home. Walker was not licensed. Read More...
Water Conserving Plumbing Fixtures Law
Effective January 1, 2017, California law will require property owners for properties built before 1994 to install water-conserving plumbing fixtures by 2017 for single family properties and by 2019 for all other properties. In addition, if a property is altered or improved after 2014, water-conserving plumbing fixtures must be installed as a condition of the issuance of the final permit. Read More...
Court Holds that a Broker Breached his Independent Contractor Agreement by Failing to Register His Partner’s Buisness with the Department of Real Estate
In Thompson v. Asimos, a California appellate court held that a broker breached his independent contractor agreement with a business collaborator by failing to register the collaborator’s business with the Department of Real Estate (“DRE”). In Thompson, plaintiff operated a consulting firm that assisted companies in colocation arrangements. Plaintiff began collaborating with defendant, a real estate broker. The partners operated under an independent contractor agreement used by real estate brokers and agents. Read More…
Court Denies Real Estate Agent Claim to Entitlement of a Commission in the Amount of $925,000.00
In Westside Estate Agency, Inc. v. Randall, a California appellate court denied a real estate agent a commission in the amount of $925,000. In Westside, plaintiff agreed to help friends locate a home in Los Angeles. They did not have a written agreement. Plaintiff eventually identified a property, which was listed at $65 million. Over the next month, the defendants and the seller exchanged numerous offers and counter-offers. The seller finally accepted the defendants’ offer of $45 million, subject to certain conditions. The buyers rejected those conditions. Read More...
Court Holds the Homeowners’ Bill of Rights Does Not Provide for Injunctive Relief
In Lucioni v. Bank of America, N.A., a California Appellate Court held that the Homeowners’ Bill of Rights (“HBOR”) does not allow for injunctive relief based on a lender’s alleged lack of standing to foreclose. In Lucioni, plaintiff obtained a loan secured by a deed of trust. Bank of America transferred its interest in the loan to Raymond James Bank, N.A. Raymond James initiated foreclosure proceedings. Plaintiff sought injunctive relief to stop the foreclosure arguing that Raymond James, Bank of America and others lacked standing to foreclose because none of them owned the beneficial interest in the loan or deed of trust. Read More...
Court Rules That Developer is Entitled to Recover Against Land Onwer Who Breached Contract to Sell His Land to Developer
In Schellinger Brothers v. Cotter, a developer, Schellinger Brothers (“Developer”), entered into an agreement to buy a large tract of land in Sebastopol, California, from the land owner James Cotter (“Seller”). Controversy surrounding the proposed commercial development eventually led to the Developer suing the City of Sebastopol, but Developer lost that case and its appeal. Following that action, Seller sued Developer claiming that Developer had breached their contract due to the unreasonable amount of time it was taking to secure approval of the project. The trial court denied the claim that Developer had breached the contract, but gave Developer a deadline of two years for it to obtain final approval of a subdivision Map from the City of Sebastopol. That ruling was affirmed on appeal. While that case was on appeal, Developer commenced a new action against Seller in which Developer claimed that Seller had breached their contract. The trial court entered judgment in favor of Developer and awarded it damages against Seller in the amount of $2,855,431.77, in addition to attorneys’ fees and costs. Seller appealed. Read More...
The Effects of Trends in Real Estate on Legal Issues
There is no doubt that changes in the real estate market affect legal issues pertaining to real estate professionals. This is evident when reviewing the changes in the real estate market during the last nine (9) years.
In 2007, the Great Recession hit the real estate market. As a result, there were unprecedented increases in foreclosures and short sales due to losses of income and depreciation in the value of homes. The situation was compounded by loans secured by real estate, for which borrowers did not qualify. There were also questionable loan products with adjustable rates, creating a situation where borrowers could no longer afford their properties. As a result, from 2007 to approximately 2011, the real estate industry dealt with short sales and the REO resale market. Read More...
Contra Costa Association of Realtors’ Disclosure
As previously reported, the Contra Costa Association of Realtors (“CCAR”) has created a new disclosure. It is recommended that agents working in Contra Costa County utilize that disclosure.
We have recently received inquiries as to what disclosures and advisories are inclusive of CCAR’s form and do not need to be separately provided. If CCAR’s disclosure is provided, the following advisories do not need to be separately provided to a buyer: CLUE; Fireplace; Drought; Electronic Signature; Walnut Creek Smoke; and Wire Fraud. Read More...
Agents are now using drones to take video and photographs for purposes of marketing properties. However, the use of drones is creating potential liability for brokerages.
Liability relating to drones arises out of the following:
1. Potential claims for invasion of privacy;
2. Bodily injury or property damage affiliated with uncontrolled drones;
3. Cyberliabilty and hacking issues; and
A California Appellate Court Awarded a Homeowner’s Association Attorney’s Fees In an Action Against a Property Owner to Enforce Covenants, Conditions and Restrictions
In Rancho Mirage Country Club Homeowners Association v. Hazelbaker, the Hazelbakers owned a condominium in the Rancho Mirage Country Club Development. They applied to the Homeowner’s Association (“HOA”) to make modifications to their property. The changes were approved, but the homeowners allegedly made changes that exceeded the scope of the approval. The HOA sent the homeowners a request for mediation. Read More...
Court Holds Tenant Cannot Be Held Liable to Landlord for Injuries to a Worker in a Common Area
In Morlin Asset Management LP v. Murachanian, a California Appellate Court held that a tenant was not required to indemnify a landlord for injuries incurred by a worker in a common area. In Morlin, a worker was cleaning the tenant’s office in a commercial building. The worker slipped and fell on stairs in a common area of the building. Read More...
Ninth Circuit Holds That Real Estate Professionals May Deduct Rental Losses From Their Taxable Income Only If They Materially Participate in Rental Activities
In Gragg v. United States, et al., Delores and Charles Gragg asked the United States Court of Appeals for the Ninth Circuit to determine the circumstances in which real estate professionals may deduct investment rental property losses from their taxable income.
In 1986, Congress passed the Tax Reform Act of 1986 (“Act”) (codified at Internal Revenue Code section 469), in an effort to curb taxpayers’ deductions of losses from “passive” investments. Specifically, Congress implemented a rule whereby taxpayers could not reduce their taxable income with investment losses unless they materially participated in the investment. However, the Act treated investments in rental properties differently, and made any losses related to investment rentals per se passive, and therefore, per se nondeductible. In 1993, believing that the Act had gone “too far,” Congress enacted Section 469(c)(7), which created an exception to the per se bar on rental loss deductions, to wit: the per se rental bar “shall not apply” to taxpayers who qualify as real estate professionals. Read More...
Issues with Agent Partnerships and Teams
Many agents have formed partnerships, which have a number of advantages. For example, agents can work together on transactions and share the work. It also allows agents freedom to go on vacation, but ensure that their clients’ needs are addressed. It also allows agents with different assets to complement each other. However, it is important that agents have an appropriate written agreement if they are forming partnerships. Read More...
Shannon B. Jones Law Group Successfully Defenses Arbitration
In August 2016, the Law Group successfully defensed a claim by a real estate agent against one of our clients arising out of the agents’ partnership. In that case, two agents executed a partnership agreement agreeing to equally share commissions. The partnership was terminated. Read More...
Question & Answer Regarding List Price
Question: I am representing a buyer who made a full-price offer on a property. The seller issued a counter at $38,000 more than the offer. The buyer rejected the counter. The seller subsequently lowered the list price. My buyer made the same offer, which was subsequently rejected. Does the seller have to accept the buyer’s offer, since the offer was at or exceeded the list price? Read More...
Court Holds That Three Year Statute of Limitations Applies to a Quiet Title Action Where Plaintiff Challenged the Validity of the Joint Tenancy Deed
In Walters v. Boosinger, a California Appellate Court held that a quiet title action was subject to a three-year statute of limitation and, thus, time-barred as the claim was not brought within three years of actual notice of the facts constituting the basis for a fraud-based quiet title claim. Read More...
Court Holds Land Owner Liable for Injury to Invitee Off Site
In Vasilenko v. Grace Family Church, a California Appellate Court held that a land owner may be held liable for injuries sustained by an invitee outside the land owner’s property, where the injuries allegedly resulted from the land owner’s use of an off-site parking lot. In Vasilenko, plaintiff was hit by a car and injured while crossing a road on his way from an overflow parking lot to church. There was no marked crosswalk nor traffic signal. Read More...
Court Binds Parties to Purchase and Sale Agreement Pursuant to Texts Between Agents
In St. John’s Holdings, LLC v. Two Electronics, LLC, a Massachusetts court recently found a contract to be enforceable under the Statute of Frauds through texts between the real estate brokers. In St. John’s Holdings, buyer offered to purchase certain real property for $3.232 million through a letter of intent. The seller responded. The agents continued to text back and forth with additional terms. The seller subsequently declined to sell the property to the buyer and sold the property to a second buyer. Read More...
Court Orders Yelp to Remove Defendant’s Defamatory Statement from its Website
In Hassell v. Bird (Yelp, Inc.), a California appellate court recently upheld an order requiring Yelp to remove a defamatory statement from its website. In Hassell, plaintiff was an attorney who sued a former client seeking to remove a Yelp review that had been posted and contained falsehoods. Read More...
Appellate Court Allowed a Plaintiff to Pursue a Claim Against a Lender By Alleging That the Lender Had No Interest in the Debt or Property
In Sciarratta v. U.S. Bank National Association, a California Appellate Court allowed a plaintiff to pursue a claim against a lender for wrongful foreclosure by alleging that the home was wrongfully foreclosed upon by an entity with no interest in either the debt or the property. In June 2005, plaintiff obtained a $620,000 Read More...
A California Appellate Court Held That The Mere Loss of a Homeowners’ View Without the Physical Taking of a Property does not Constitute a Compensable Taking by a City
In Boxer v. City of Beverly Hills, plaintiff and others owned homes in Beverly Hills. The homeowners had unobstructed views of the hills of Beverly Hills, the Hollywood hills, and the Los Angeles’ basin, including the Hollywood sign. In 1989, the City of Beverly Hills planted approximately 24 sequoia trees in Roxbury Park, below plaintiffs’ homes. The City initially complied with the homeowners’ requests that the trees be trimmed and maintained, Read More...
Court Holds That a Lease May Not be Forfeited Unless There is a Material Breach
In Boston LLC v. Juarez, a California Appellate Court held that a lease may not be terminated unless the tenant materially breaches it. In Boston, defendant entered into a rental agreement with the plaintiff. That agreement required the tenant to obtain and pay for renters’ insurance. He failed to do so. The agreement provided that “Any failure of compliance or performance by Renter shall all Owner to forfeit this Agreement and terminate Renter’s right to possession.” Read More...
Court Finds Homeowners’ Association to be the Prevailing Party in a Dispute with a Homeowner regarding Covenants, Conditions and Restrictions
In Almanor Lakeside Villas Owners Association v. Carson, a California Appellate Court awarded a homeowners association (“HOA”) over $100,000 in fees and costs. In Almanor, defendants Carson purchased two properties on Lake Almanor in Plumas County. Read More »
Appellate Court Upholds Award of More than $2000,000 for Damage to Trees
In Salazar v. Matejcek, a California Appellate Court upheld a substantial award for a neighbor’s trespass to trees. In Salazar, plaintiffs own a 10-acre parcel of rural property. The parcel was undeveloped except for a small cabin. Plaintiffs and their children vacationed at the property. Read More »
Court Holds That No Deed Is Required To Transfer Real Property Into Trust
Shannon B. Jones Law Group Obtains Dismissal in Zuckerberg Case
Shannon B. Jones Law Group, Inc. recently obtained a dismissal of a case against a real estate agent without any compensation by the agent. In Voskerician v. Zuckerberg, plaintiff claimed that as part of an agreement to sell his interest in certain real property, Mark Zuckerberg, the founder of Facebook, agreed to provide him not only with monetary compensation, but with referrals and introductions to friends and family of Facebook. Read More »
In Long v. Provide Commerce, Inc., a California Appellate Court recently declined to enforce an arbitration provision, which was agreed upon by a consumer through a hyperlink at the bottom of the web page. In Long, plaintiff purchased a floral arrangement from ProFlowers.com. Read More »
Court Holds that a Home Loan Borrower May Assert a Claim that the Foreclosure was Wrongful Because the Underlying Assignment of the Deed of Trust was Void
In Yvanova v. New Century Mortgage Corporation, the California Supreme Court recently allowed a home borrower to assert a claim that a non-judicial foreclosure sale was wrongful because the assignment of the deed of trust was void. In Yvanova, plaintiff executed a promissory note in the amount of $483,000, which was secured by her home located in Woodland Hills, California.
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Court Denies Buyer Rescission When the Buyer Delayed After Two Years
In DM Residential Fund II, LLC v. First Tennessee Bank National Association, the Ninth Circuit Court of Appeals declined to permit a buyer to sue a seller for rescission after delaying two years to bring the claim. In DM Residential, defendant First Tennessee owned the residential property, which it had purchased at a non-judicial foreclosure sale . Read More »
Court Finds Lender Potentially Responsible for "Dual-Tracking" of a Loan Modification and Foreclosure Proceedings
In Majd v. Bank of America, a California appellate court recently allowed a borrower to pursue a claim against Bank of America for “dual-tracking” the borrower’s loan modification application and foreclosure proceeding. In Majd, plaintiff borrowed money to purchase a home in February 2012. Plaintiff fell behind on his payments and contacted the bank to apply for a loan modification.
Court of Appeal Rejects Tenant’s Claim that Landlord’s Unlawful Detainer Complaint Arose Out of Tenant’s Exercise of Protected Activity
In Olive Properties v. Coolwaters Enterprises, Inc., the Court of Appeal rejected the tenant’s claim that the landlord’s filing of an unlawful detainer action several weeks after the tenant filed suit for breach of the lease covenants was retaliatory and subject to strike. Coolwaters Enterprises leased a shopping center space from Olive Properties. Read more »
Court Rules That Provision In Real Estate Purchase Contract Prohibited Introduction of Evidence to Assist in Determining the Meaning of the Contract's Terms
In Hot Rods, LLC v. Northrop Grumman Systems Corp., a California appellate court excluded evidence to determine contract terms in real property purchase and sale agreement. In Hot Rods, the plaintiff agreed to buy certain real property in Anaheim. Read More »
Does the Use of an Apartment as an Airbnb Rental Violate Rent Control Ordinances?
In Chen v. Kraft, the appellate division of the Los Angeles County Superior Court addressed whether an unlawful detainer defendant violated a rent stabilization ordinance by using her apartment as an Airbnb rental. In Chen, the defendant rented a one-bedroom apartment in Los Angeles from the plaintiff. Read More »
California Supreme Court Confirms That Civil Procedure Section 580b Prohibits a Lender From Collecting a Deficiency Following a Short Sale
In Coker v. JP Morgan Chase Bank, N.A., the California Supreme Court considered whether the anti-deficiency protections of Civil Procedure section 580b apply to a borrower who, with the permission of her lender, sold her residence to a third party for less than was owed on her loan. Read More »
Court Holds That Submitting An Appraisal To a Lender To Obtain Financing Renders the Contents of the Appraisal Admissible
In Transbay Auto Service, Inc. (“Transbay”) v. Chevron USA, Inc. (“Chevron”), Transbay entered into a service station franchise relationship with Chevron, whereby Transbay paid rent to Chevron for the right to operate a service station located at 301 Claremont Boulevard, San Francisco, California (“Property”), under the Chevron brand. After several years, Chevron decided to sell the Property, and made what it deemed to be a “bona fide offer” to sell the Property to Transbay, in accordance with the Petroleum Marketing Practices Act (“PMPA”). A “bona fide offer” under the PMPA is measured by an objective market standard. To be objectively reasonable, the offer must approach fair market value. Read More »
Court Enters Judgment in Favor of Investor in Breach of Contract
The Law Group recently obtained a judgment in favor of a client/investor in a breach of contract case after a wrongful foreclosure sale. A client/investor purchased a property at a foreclosure sale. The owner/borrower would not leave. She made an offer to purchase the property from the investor, which was accepted. When she could not perform, he terminated the agreement. Read More »
Court Holds That A Shifting Fees Provision In An Arbitration Agreement Is Unconscionable
In Brinkley v. Monterey Financial Services, Inc., Plaintiff signed up to receive six real estate coaching sessions through Real Estate Investor Education (“REIE”) for $4,195. Plaintiff paid $850 and financed the balance of the purchase price through REIE’s “Retail Installment Contract” (“RIC”). The RIC contained a choice of law provision, which provided that the contract was to be governed by the law of the state in which Plaintiff resided. Plaintiff identified her residence as being in the State of Washington. Read More »
Court Holds That Landlords Could Not Be Held Liable For Injuries Suffered As a Result of Their Tenant's Storage of Explosives at the Property
In Garcia v. Holt, a court held the landlord was not liable for injuries as a result of the tenant maintaining explosives at the premises. In Garcia, Defendant landlords own a home, which they rented on a month-to-month basis. The landlords were not aware that the tenant made homemade explosives and stored them at the property. Read More »
Court Holds That a Parties' Rental Agreement Provided for Forfeiture of the Premises Based on any Breach by the Tenant Regardless of the Materiality of the Breach
In Boston LLC v. Juarez, a court terminated a lease based on an immaterial breach by the tenant. In Boston, defendant entered into a rental agreement with the plaintiff. That agreement required the tenant to obtain and pay for renters’ insurance. He failed to do so. The agreement provided that “Any failure of compliance or performance by Renter shall all Owner to forfeit this Agreement and terminate Renter’s right to possession.” Read More »
Court Finds That a Recorded Grant Deed is Not the Only Means of Proving That Person Has Title of Record
In Carloss v. County of Alameda, the County of Alameda seized and sold residential property that was in default in payment of the property taxes. The sales proceeds exceeded the amount of the taxes. Under California Revenue and Taxation Code section 4675, a “person with title of record” to the property (or that person’s successor) can claim those excess sale proceeds from the County. Read More »
Court Upholds Arbitrator's Decision Despite the Arbitrator Making an Error
In SingerLewak LLP v. Gantman, a California appellate court upheld an arbitrator’s decision, even though the arbitrator may have misinterpreted the law. In SingerLewak, defendant Gantman was a partner in the accounting firm of SingerLewak. He left the firm and took several clients with him. In accordance with the parties’ non-compete agreement, the accounting firm demanded that Gantman pay the firm $260,000. Read More »
Court Finds that Insurance Company Is Not Responsible For Reimbursing a Homeowner for Preventive Work
In Grebow v. Mercury Insurance Company, plaintiffs were advised by a structural engineer that the beams supporting the rear of their house were corroding and in danger of collapse. Plaintiffs spent $91,000 in remediation work. They submitted a claim to their homeowners’ insurer, Mercury Insurance Company. Mercury denied the claim finding that there was no loss under the policy. The policy provided for payment in the event that there was a collapse, but there was no provision in the policy relating to preventive work. Plaintiffs filed suit for breach of contract and breach of the implied covenant of good faith and fair dealing. Mercury Insurance filed a motion for summary judgment on the grounds that there was no coverage. The trial court agreed with Mercury and plaintiffs appealed. The appellate court affirmed holding that the insurance policy was clear that it covered a complete collapse of the home, but did not cover mitigation work.
Court Limits Attorney's Fees to Maximum Amount Set Forth in Code
In 511 S. Park View, Inc. v. Tsantis, the Appellate Division of the Los Angeles County Superior Court limited the award of attorney’s fees to the amount set forth in the Code, despite an attorney’s fees provision in the lease. In 511 S. Park, plaintiff filed an unlawful detainer action against the tenants. The tenants prevailed at trial. Read More »
Court Holds that a Borrower Who Lost a Property Due to a Wrongful Foreclosure Claim May Assert Claims Against the Lender Even if They Had No Equity
In Miles v. Deutsche Bank, Plaintiff owned Property and was engaged in loan modification negotiations with his lender and loan servicer. However, the lender ultimately foreclosed on the Property. Plaintiff filed suit and the lender demurred to the causes of action for breach of contract, negligent misrepresentation, and fraud. Read More »
California Appellate Court Orders Rescission of a Seven-Year-Old Purchase Agreement Due to Seller's Misrepresentations
In Wong v. Stoler, a California Appellate Court ordered the rescission of a seven-year-old purchase agreement because the sellers misrepresented the property was connected to the city sewer system. In Wong, plaintiffs purchased the property and undertook an extensive remodeling project. A few months later, plaintiffs learned the home was connected to a private sewer system without a formal association in place to pay for maintenance. Read More »
Court Dismisses Pre-Foreclosure Action Challenging the Validity of the Lender's Interest in the Deed of Trust
In Kan v. Guild Mortgage Company, a California Appellate Court recently dismissed a pre-foreclosure lawsuit against the lender wherein the borrower claimed there were discrepancies in the assignment of the loan. In Kan, plaintiffs borrowed money from defendant under two promissory notes secured by deeds of trust on real property. Read More »
Supreme Court Holds Tenants Jointly and Severally Liable for Rent Under Unpaid Lease
The California Supreme Court recently reversed a judgment of the court of appeal. The Court held that a landlord may recover against one of multiple tenants, so long as the rents owed remained unpaid. In DKN Holdings LLC v. Faerber, defendants leased certain commercial space from plaintiff. The tenants were jointly and severally liable on the lease. Read More »
Court Holds that a Person Asserting a Cliam of Disability Discrimination Based on the Denial of a Service Dog May Assert a Cliam Under the Disabled Persons Act and Unruh Civil Rights Act
Plaintiff and his son were allegedly denied service at a restaurant because plaintiff was disabled and was accompanied by a service dog. Plaintiff sued the restaurant for a violation of the Disabled Persons Act (“DPA”) and the Unruh Civil Rights Act. The Complaint sought damages and injunctive relief. Read More »
Court Awards Borrower Attorney’s Fees in a Wrongful Foreclosure Action
In Monterossa v. Superior Court (PNC), a California Appellate Court awarded a homeowner attorney’s fees after they stopped a foreclosure sale. In Monterossa, plaintiffs procured a loan through PNC Bank, which was secured by a deed of trust. They failed to make payments on that loan. PNC started a foreclosure, but at the same time, sent them a hardship-assistance package.Read More »
Court Finds Lender May be Liable for Unfair Collection Practices
In Alborzian v. JPMorgan Chase Bank, a California Appellate Court recently held that a lender may be liable under the Unfair Collection Practices laws for implying that a debt is still owed, when it is not. In Alborzian, Plaintiffs took out two loans to purchase a home in 2005. Both loans were secured by deeds of trust on their personal residence. Read More »
Court Holds Guarantors Liable of Commercial Loan
In CADC/RAD Venture 2011 – I LLC v. Bradley, a California Appellate Court upheld the enforceability of commercial loan guarantees against the lenders. In CADC, Defendants sought to purchase undeveloped land in Napa, California, pursuant to an Internal Revenue Code Section 1031 Exchange. As part of the transaction, Defendants sought a loan in the amount of $2,100,000.Read More »
Court Holds Plaintiff Fails to Show Violation of ADA
A Ninth Circuit Court of Appeals held that a plaintiff failed to show violations of the Americans with Disabilities Act (“ADA”) in a commercial property. In Kohler, Plaintiff was wheelchair bound. Plaintiff sued Bed Bath & Beyond for violations of the ADA after he encountered alleged obstacles in using the restroom at a Bed Bath & Beyond retail store.Read More »
Court Allows Licensed Real Estate Salespersons to Share Commissions Without the Involvement of Their Brokers
In Sanowicz v. Bacal, a California Appellate Court recently permitted an agent to pursue a commission from another agent based on a commission sharing agreement, even though the broker did not sign or approve of the agreement. Read More »
Landlord Held Liable for Attorneys’ Fees Associated with Tenant’s Injury Caused in Common Area
In Hemphill v. Wright Family, LLC, a California Appellate Court held that a landlord was liable for the tenant’s attorneys fees associated with bringing a lawsuit for damages arising from injuries caused by a hazardous condition in the common area. In Hemphill, Plaintiff leased a mobile home space in the Roadrunner Club. Read More »
California Appellate Court Orders Property Owner to Reduce Noise Caused by His Installation of Hardwood Floors
In Ryland Mews Homeowners Association v. Munoz, a California Appellate Court recently required a homeowner of a condominium unit to address noise caused by his installation of hardwood floors. In Ryland, Ruben Munoz, an attorney, and his wife moved into an upstairs condominium unit in a complex managed by plaintiff. Read More »
Court Holds That Landlord Was Properly Included in a Complaint Arising From an Americans With Disabilities Act Violation
In Rush v. Sport Chalet, Inc., the Ninth Circuit Court of Appeals found that a landlord was properly included in a lawsuit arising out of an alleged violation of the Americans With Disabilities Act (“ADA”). In Rush, plaintiff was wheelchair bound and encountered various obstacles and barriers, which interfered with her access to three retail stores in a shopping mall. Read More »
What to do if Designated Officer Unavailable
We recently received a call from a brokerage indicating that the designated officer was on vacation, but a form had to be signed by that designated officer. This issue has come up in the past. For example, how should a brokerage address a situation if the designated officer becomes incapacitated or passes away? Read More »
Court of Appeals Rejects Plaintiffs' Claim for Contractual Attorneys' Fees
In Rideau v. Stewart Title of California, a California appellate court rejected a buyers argument that they were entitled to attorneys fees on their successful claim against Stewart Title for breach of contract. Read More »
Appellate Court Holds That an Entity May Substitute as the Trustee for a Lender Even if the Substitution was not Recorded
In Ram v. OneWest Bank, FSB, a California Appellate Court permitted an entity to substitute as the trustee for a lender on a deed of trust even if the substitution was not recorded. In Ram, plaintiffs borrowed money to purchase a home. A deed of trust was recorded against the property. They defaulted on the loan and a foreclosure was initiated. Read More »
Appellate Court Upholds Release Pertaining to Future Claims
In Belasco v. Wells, a California Appellate Court recently barred construction defect claims against a home builder where a buyer had previously signed a settlement agreement containing a release. Read More »
Court Affirms Foreclosure Sale Where Homeowners Could Not Prove the Ability to Save Their Home
In Jones v. Wachovia Bank, a California Appellate Court recently affirmed a judgment permitting a foreclosure sale where the homeowners were unable to prove the ability to pay the amount owed to the lender. In Jones, plaintiffs received notice that their home mortgage payments had fallen in arrears. They failed to bring the loan current. Subsequently, a notice of trustee sale was recorded. Read More »
Court Denies a Party Attorneys’ Fees in Trespass Action
In Belle Terre Ranch, Inc. v. Wilson, a California Appellate Court recently reversed an award of attorneys fees in a trespass case. In Belle Terre, the plaintiff and defendant had a dispute over the location of the property lines between their adjoining properties. Plaintiffs sued defendant to quiet title to a strip of land and for trespass. Read More »
Law Office Obtains Dismissal of Broker in Sewer Misrepresentation Case
The Shannon B. Jones Law Group recently forced a dismissal of a lawsuit against a selling agent for an alleged misrepresentation that a property was on sewer, when it was on septic. In that case, the listing agent marketed the property as being on sewer. The buyer and selling agent relied upon the representations in the Multiple Listing Service and on the marketing materials. Read More »
Court Holds that a Party May Not Force Their Neighbor to Install a Drainage Facility to Address the Party’s Water Issues
In Aspen Grove Condominium Association v. CNL Income Northstar LLC, a California appellate court recently held that a property owner may not force a downhill neighbor to maintain a retention basin for the benefit of the party’s property. In Aspen Grove, plaintiff consisted of a condominium complex located at the Northstar ski resort. Read More »
Court Prevents HOA Manager from Rejecting Owner’s Tender of Partial Payments Toward Delinquent Assessments
In Huntington Continental Townhouse Association, Inc. v. Miner, a California appellate court recently held that a homeowners’ association (“HOA”) may not reject an owner’s partial payments made toward delinquent assessments. In Huntington, the defendant was an owner of real property in the plaintiff HOA. Read More »
Court Holds That a Notice of Abatement Action is Not a Defect In, Lien or Encumbrance on Title and That a Preliminary Title Report Is Not a Contract
In Stockton Mortgage, Inc. v. Tope, a California appellate court affirmed summary judgment in favor of First American Title Insurance Company (“First American”) in a title dispute. Read More »
Court Appoints a Court Clerk to Execute Closing Documents for a Non-Compliant Seller
In Blueberry Properties, LLC v. Chow, an appellate court approved the appointment of a court clerk to sign closing documents on behalf of a seller who refused to close the escrow. In Blueberry Properties, defendant Chow entered into an agreement to sell an apartment complex she owned to plaintiff. She later refused to complete the sale and returned the money to plaintiff. Read More »
Court Holds Lender's Appraiser Not Liable for Alleged Misrepresentation to a Land Purchaser
In Willemsen v. Mitrosilis, a California appellate court recently held a lender’s appraiser not liable to a land purchaser for an alleged failure to supply information, which would have influenced plaintiff’s decision to purchase the land. In Willemsen, plaintiff offered to purchase a lot. Plaintiff applied for financing through a bank. The bank retained defendant, an appraiser, to determine the value of the land. Read More »
Court Refuses to Enforce Arbitration Agreement Containing Electronic Signature
In Ruiz v. Moss Bros. Auto Group, Inc., a California Appellate Court recently denied a petition to compel arbitration containing an electronic signature. In Ruiz, plaintiff was employed by defendant Moss Bros. Auto Group. He filed suit for defendant’s failure to pay overtime and other wages. Read More »
Court Holds that a Borrower Could Not Sue the County Recorder or Sheriff After a Nonforeclosure Sale
In Lyons v. Santa Barbara County Sheriff’s Office, a taxpayer/property owner attempted to sue the county recorder and sheriff for their roles following a nonjudicial foreclosure sale of her property. In Lyons, plaintiff owned a condominium, which was sold at a Trustee’s Sale after she defaulted on her loan. Following the sale, she was evicted pursuant to an unlawful detainer action. Read More »
Court Holds That Borrower is Not Required to File Lawsuit to Effect Notice of Rescission Under TILA
In Jesinoski v. Countrywide Home Loans, Inc. (January 2015), the U.S. Supreme Court considered the issue of how a borrower gives notice of rescission under the Truth in Lending Act (“TILA”). Under TILA, borrowers have a right to rescind up to three years after obtaining the loan if the lender did not satisfy TILA’s disclosure requirements. Read More »
Court Holds Lender Waived Right to Deficiency Judgment
In First California Bank v. McDonald, a California appellate court recently held that a lender waived its right to a deficiency judgment where it permitted the sale of real property outside of the judicial foreclosure without the borrower’s consent. In First California, a husband and wife signed a promissory note secured by a deed of trust against certain real property in California. Read More »
Sonoma Jury Awards Buyer $18.7M Arising Out of Seller’s Fraud
In a case entitled Cardoza v. Reed, a Sonoma jury awarded a married couple $18.7 million for the loss of rent and consequential damages relating to the sale of a commercial property. In Cardoza, plaintiffs purchased a commercial property from David Reed. Thereafter, Reed’s company moved out of the building, decreasing the monthly rent from $30,000 to $8,000. Read More »
Court Holds Lender’s Appraiser Not Liable for Alleged Misrepresentation to a Land Purchaser
In Willemsen v. Mitrosilis, a California appellate court recently held a lender’s appraiser not liable to a land purchaser for an alleged failure to supply information, which would have influenced plaintiff’’s decision to purchase the land. In Willemsen, plaintiff offered to purchase a lot. Plaintiff applied for financing through a bank. Read More »
Do Courts Review the Boiler Plate Language in Contracts?
Agents often ask us whether courts consider the boiler plate disclaimer language in real estate agreements. The answer is “Yes.”Read More »
Court Holds Removal of a Person’s Name from a Deed of Trust Prior to Recording Does Not Render it Void
In Lin v. Coronado, plaintiff purchased a residential property at a foreclosure sale with two other investors. She allegedly contributed $150,000, while the other investors contributed $100,000. Following the auction, a trust deed was delivered to one of the investors stating that the property was conveyed to the investors and plaintiff, but indicated that plaintiff owned zero percent. Read More »
Mortgage Lender Pays $83,000 Penalty for RESPA Violations
A Connecticut mortgage lender recently agreed to pay an $83,000 monetary penalty for violating the Real Estate Settlement Procedures Act (“RESPA”). The lender focused primarily on loss mitigation financing to distressed buyers. Originally, the lender was financed by a hedge fund and therefore, the lender and the hedge fund split the origination fees paid by the consumer.Read More »
Court Prevents Lender from Collecting on Insurance Proceeds After Full Credit Bid
In Najah v. Scottsdale Insurance Company, a California Appellate Court held that a lender’s full credit bid at a foreclosure sale barred it from subsequent recovery for pre-foreclosure damage to the property. In Najah, plaintiff sold a commercial property to Orange Crest Realty Corp. Orange Crest made a partial payment by borrowing approximately $10,000,000 from a third party. Read More »
California Supreme Court Holds a Franchisor Not Liable for the Actions of Employees of the Franchisee
In Patterson v. Domino’s Pizza, LLC, an employee of a Domino’s franchise sued the franchisee and Domino’s Pizza, LLC, the franchisor, for sexual harassment and assault by a manager. The plaintiff alleged that the owner of the franchise testified that he was told by a Domino’s Pizza “Area Leader” to fire the manager. Read More »
Court Holds Neighboring Property Owner Does Not Have an Obligation to Disclose an Easement to a Prospective Purchaser
In Hoffman v. 162 North Wolfe, LLC, a California appellate court recently held that a property owner does not owe a duty to a prospective purchaser of a neighboring property to make disclosures. In Hoffman, plaintiffs purchased a commercial property in Sunnyvale, California. Read More »
Court Upholds Documentary Transfer Tax Even Though the Property Was Not Sold
In 926 North Ardmore Avenue, LLC v. County of Los Angeles, an appellate court recently upheld the imposition of a documentary transfer tax on the sale of the legal entity that owned real property, even though title to the real property did not change. In 926 North Ardmore, various entities owned BA Realty, LLP. BA owned 926 North Ardmore Avenue, LLC. Read More »
Court Holds that a “Red Tag” Does Not Terminate a Lease for the Property
In Erlach v. Sierra Asset Servicing, LLC, a California appellate court held that a County “red tag” Notice of Code Enforcement does not terminate a lease. In Erlach, Mary Schwann owned a residence in which she leased several rooms to various tenants. Plaintiff leased one bedroom, one bathroom and the common areas. Read More »
Court Awards Sanctions to Listing Agent Real Estate Agent for Frivolous Lawsuit
In Peake v. Underwood, a California appellate court recently upheld an award of sanctions against a buyer of property in favor of a listing agent. In Peake, plaintiff filed a lawsuit against the sellers and listing agent claiming nondisclosures relating to defective subflooring. Read More »
Court Allows Plaintiffs to Proceed with Claims Against Their Lender
The plaintiffs in Fleet v. Bank of America, N.A. (9/24/14) obtained a loan from Bank of America. In 2009, they applied to modify their loan under the Making Homes Affordable Act. In 2011, they were approved for a trial period plan under a Fannie Mae modification program. It was plaintiffs’ understanding that they had to make three trial period payments. Read More »