Articles Posted in real estate law

Published on:

In California, a tree growing on a property line is considered a “line tree,” and the owners on both sides have rights and responsibilities. The Civil Code states that they own the tree in common. (Civil Code section 834) As a result, neither owner is free to cut down the tree without consent of the neighbor, nor to cut away the part in his side if it would injure the common interest in the tree. If they do, they can be liable for double or triple the harm done. Anyone with a tree line concern should consult with a Sacramento and El Dorado real estate attorney before taking action, or they may be in the position of the landowner who recently was hit with a judgment for over $107,000.

real estate attorney line tree pine.jpgIn Kallis v Sones there was an Aleppo pine tree growing on the property line. Close to the base it split into two separate trunks, which were far enough apart that the fence ran between them. The defendants became concerned that the tree would topple over, so they hired workers who cut down the entire tree. The tree was large- 70 feet tall, and the separate trunks measured 23 inches & 24 inches in diameter. The shocked neighbors sued.

The tree cutters lost the suit, and the contested issue became damages. Generally, damages may be awarded in an amount that will compensate for the detriment that was caused. The court awarded damages for the value of the entire tree, not just the portion on the plaintiff’s side. The defendants complained that the amount should be reduced to the percentage of tree that was on plaintiff’s side of the line. The court said no. The tree’s unusual size and form made it unusual. The large canopy shaded the plaintiff’s entire home. The large canopy was highly valued and had great personal value to the plaintiffs. The court had discretion to determine the measure of damages, and was not required to reduce it.

Published on:

Last post I discussed the decision in Scott Call Jolley v. Chase Home Finance, Inc., where there were ongoing disputes between the borrower and lender, and the lender made many representations that they would likely agree to a loan modification. The court concluded a duty may have been created that could make the lender liable for its negligence. Another aspect of that decision was the Lenders efforts to get into evidence documents and websites which it could not show were authentic, and the Court refused to allow the evidence. Anyone who is concerned about presenting evidence to the court should consult an experienced Sacramento and El Dorado real estate lending attorney. In this decision, the attorney did not do so well.

judicial notice evidence sacramento attorney.jpgThe problem arose when Chase asked the bank to take “judicial notice” of facts. The doctrine of Judicial Notice is a substitute for formal proof. A party asks the court to take judicial notice of certain matters that are assumed to be indisputably true, and the introduction of evidence to prove them will not be required. In California it is allowed by provisions of the Evidence Code, sections 450 to 460.

This case involved disputes between a borrower and his lender Washington Mutual, which went into FDIC receivership and acquired by Chase. Chase bought the assets of WaMu through a purchase agreement between Chase and the FDIC. The Purchase Agreement required Chase to assume liability for WaMu’s accounts. However, it stated that Chase did NOT assume liability for any borrower claims arising out of WaMu’s lending activities. That is what Jolley’s lawsuit was about.

Published on:

California law has had a persistent rule that, when it comes to real estate loans, a lender does not own a borrower any duties beyond those expressed in the loan agreement, except those imposed due to special circumstances. Courts rarely find those special circumstances, and hold lenders and buyers to routine, arms-length transactions. Last year I discussed a lender who told the borrower to skip a payment. In a recent decision in Northern California, where there were ongoing disputes between the borrower and lender, and the lender made numerous representations that they would likely agree to a loan modification, a duty may have been created that could make the lender liable for its negligence. The court referenced the recent changes in law at both the state and federal level to protect homeowners (even though these rules did not apply in this case) indicate a policy to protect real estate borrowers from their lender’s negligence. Lenders and borrowers concerned with the question of lender’s duties and negligence should consult with a Sacramento and Yolo real estate loan attorney.

Sacramento real estate loan attorney.jpgIn Scott Call Jolley v. Chase Home Finance, Inc., the loan was for over $2 million to renovate a property in Tiburon, and was essentially a construction loan. The loan was originally with Washington Mutual, which went into FDIC receivership and acquired by Chase. Jolley said that WaMu lost the loan documents, which held up construction financing for 8 months, and then they ad significant disputes with disbursements. WaMu agreed to a loan modification, and was later taken over by Chase. Jolley defaulted, claiming that it was due to WaMu’s breaches of contract and negligence.

Jolley claimed that Chase’s agent, on many occasions, encouraged him to complete construction because there was a “high probability” that Chase would modify the loan to avoid foreclosure. As a result, the plaintiff spent another $100,000 to complete construction. Chase denied the modification.

Published on:

California prescriptive easements arise when someone uses someone else’s property without permission; its almost that simple. The idea is that, if the use is open, and continues for five years, the true owner of the property has time, and an obligation, to take action to stop the unwelcome use, which is really a brazen trespass. In a recent Southern California decision, the party claiming a prescriptive easement had a problem – they had permission to use the property. Not only did the court reject their claim, but it awarded attorney fees to the defendant. Anyoneone finding themselves wondering about a prescriptive easement should consult with a Sacramento or El Dorado real estate attorney..

Sacramento real estate attorney prescriptive easement.jpgIn Windsor Pacific v. Samwood Co., Windsor had a written easement giving it the right to access property and use roads across defendant’s property. Specifically, to use Tick Canyon Road, and Trash Canyon Road, two roads that I certainly want to travel on. However, Windsor sued to establish a prescriptive easement.

The is a four prong test for establishing prescriptive easement:

Published on:

California landlords are faced with a myriad of regulatory requirements for disclosures as well as enforcement of their leases. Two new mandatory disclosures for commercial leases will be required in 2013- past energy use of the building, and whether the premises have been inspected by a “certified access specialist”, and if it was inspected, whether or not it passed. Property owners with concerns about their leases and disclosures should consult with a Sacramento and El Dorado commercial lease attorney to have their questions answered.

Sacramento El Dorado commercial lease attorney energy use.jpgENERGY USE REPORTING

The new law was actually enacted in 2009, required the California Energy Commission to set a schedule for rolling out, over time, the disclosure requirements. The commission adopted regulations in July 2012 setting the schedule:

Published on:

California equitable easements are created by courts when, balancing the conveniences of the parties and considering the relative hardships between them, the court refuses to prohibit a nuisance or encroachment. This is the same result, though a slightly different analysis, that an implied easement. Anyone faced with a problem use, where it appears necessary for one party but unwelcome by the other, should consult with an experienced Sacramento and Placer real estate attorney. In a recent decision, a plaintiff bought property knowing that there was a road across it used to access other parcels. There was no recorded easement, so he sued to stop the use. The defendants countered to quiet title to an easement. The court said stop complaining.

sacramento real estate lawyer - quiet title.jpgIn Linthicum v. Butterfield, the plaintiff bought parcel One in what was originally National Forest land. Prior to that, the Forest Service granted a special use permit to the owner of parcels two through ten to build an access road across parcel One, which was still owned by the Feds. Through a number of transactions, other people eventually owed Two through Ten, the Feds sold One, and the Plaintiff ended up with One. The Special Use Permit had not been transferred to the new owners of Two through Ten, but the Forest Service considered it still valid, though needing to be transferred. Owners of Two through Ten had used the road for possibly 60 years to access their property.

At trial, testimony about building an alternative route across much steeper land would require a 40 foot high retaining wall and moving 40,000 cubic yards of earth (i.e. very expensive.). The Judge did a site visit, and said the existing road was the only access, and quieted title in the easement.

Published on:

The California parole evidence rule generally prohibits evidence of oral statements that contradict the terms of a written contract. In the past several years Sacramento and El Dorado real estate attorneys often heard borrowers claim that their mortgage broker made promises about their loan regarding the interest rate, whether it was adjustable, when the rate would go up, and a myriad of other terms, that turned out to be true. These promises are in direct conflict with the terms of the written agreement, so the parole evidence rule keeps these statements out, and can result in a lawsuit being thrown out of court. However, a new California Supreme Court decision changes everything- now, the false promises may be admitted as evidence.

real estate loan fraud.jpgIn Riverisland Cold Storage vs. Fresno-Madera Production, the borrowers owed the lender over $765 thousand, and were in default. They entered a work-out with the lender. The borrowers claim that two weeks before signing the workout they met with an officer for the lender. He told them that they would extend the loan for two years in exchange for additional collateral of two ranches. However, the agreement they signed (which the borrowers did not review closely) extended the loan for only three months, and, as additional collateral, added eight separate parcels.

The borrowers again defaulted and the lender took action before the three years the borrowers were counting on. The borrowers brought the loan current, and filed this lawsuit, claiming fraud and negligent misrepresentation. The lender raised the parole evidence rule, arguing that the borrower could not prove their claims because the rule barred any evidence of oral representations contradicting the actual terms of the written agreement.

Published on:

California Construction defect claims in common interest communities are subject to a number of California statutes. The California Supreme Court recently decided that a developer can bypass all these statutes by including in the CC&Rs a provision requiring arbitration under the rules of the Federal Arbitration Act. This benefits developers as they can avoid a jury by requiring that construction defect actions be decided by an arbitrator, and gives them settlement leverage. This decision will result in Sacramento and Yolo real estate attorneys advising developers to include FFA provisions in all their CC&Rs. The FAA makes arbitration provisions irrevocable, and drastically limits the court’s ability to fix errors of the arbitrator.

CC&Rs FAA construction defect.jpgIn Pinnacle Museum v. Pinnacle Market, The developer recorded a “Declaration of Restrictions” (the Project CC & R’s) to govern a residential and commercial common interest community. As usual for CC&R’s, these contain a number of easements, restrictions and covenants, which it describes as “enforceable equitable servitudes” and “binding on all parties having any right, title or interest” in the property, and their heirs, successors and assigns. Again, as usual, The CC & R’s also provided for the creation of a nonprofit mutual benefit corporation (the Association) to serve as the owners association responsible for managing and maintaining the Project property.

The Association sued the developer, on behalf of the owners, for construction defects. The CC&Rs provide:

Published on:

California home buyers often get both a first loan and a second, usually a home equity line of credit, or “HELOC.” Generally, when a second loan is made by a different party, not as a part of the purchase, when the first forecloses, the value of the junior’s security has been wiped out (the 2nd becomes a “sold out junior”). The one form of action rule then does not prevent a lawsuit for the debt on the second. However, when the same lender makes both the 1st and 2nd loans, it is more complicated, and owners in this situation should consult with a Sacramento & Yolo real estate lawyer. There are three typical scenarios that cover possible personal liability for the second, if the first is foreclosed.

2nd deed of trust.JPG1. Original lender holds both first & second, forecloses on first.

➔There is no liability for the second, as it was a purchase money loan.

Published on:

California real estate law, and often commercial rental agreements, provide the tenant with a right of quiet enjoyment. This means that the landlord promises that during the term of the tenancy no one will disturb the tenant in the tenant’s use and enjoyment of the premises.

If the covenant of quiet enjoyment is breached, the tenant has a choice- he can stand on his lease and sue for damages, or vacate the premises and claim constructive eviction. A 1994 Third District decision found that the a Lease provision prohibited the lessee’s claim for constructive eviction, restricting his rights to a claim for damages or injunctive relief. While this is bad for tenants, the law is clear, and Commercial landlords and tenants entering leases should consult with an experienced Sacramento real estate and leasing attorney to be fully advised as to the terms of their contracts.

constructive eviction.jpgIn Lee v. Placer Title Company Placer was the tenant in a shopping center. Their premises were next door to a dry cleaners. Placer claimed that cleaning fumes made the office unusable, stopped paying rent, and vacated the premises. Lee sued for the balance of the rent owed on the lease as damages. Placer raised, as a defense, constructive eviction.