Articles Posted in real estate law

The recent trend has been for pundits and politicians to cast the banks and investment houses as victims of the credit crisis and economic collapse, some in fact to say Fannie Mae and Freddie Mac are the source of the problem. This argument, described by Barry Ritholz as The Big Lie, is contrary to the facts. As California real estate has taken a big hit in the collapse, and Sacramento, Yolo, and Placer County real estate lawyers have since been trying to unravel the impacts on individual buyers throughout California, it is important not to be fooled.

The argument goes that Congress pressured policymakers & Fannie Mae and Freddie Mac (and other banks, through political pressure) to make loans to people who were on the edge of qualifying; as lending standards were forced downwards, the risk of default went up. This included the Community Reinvestment Act, which requires regulated banks and thrifts to provide credit nondiscriminatorily to low- and moderate-income borrowers. More and more people who were not qualified got loans, and, as a result, they starting a cascade of defaults which crashed the economy. However, this does nothing to explain the course of events:

a. Similar bubbles were created outside of residential housing, such as commercial real estate and consumer credit;

Adverse Possession, like prescriptive easements, require a party to “possess” or use the property in a way that gives notice to the world of their intent. But co-owners -regardless of their percentage of ownership, or if they are tenants in common or joint tenants- all have an equal right to possession of the property. A recent Third District decision points out how difficult it is to adversely poses a co-owner, and why owners in this situation should consult with an experienced Sacramento, Yolo, or San Joaquin, Real Estate Lawyers.

In Hacienda Ranch Homes v. Sup. Court, the person claiming adverse possession (“the Possessor,” for short) had bought an undivided 25% interest in undeveloped property in San Joaquin County. Six years later they filed this action to establish their title to 100 percent based on adverse possession against the other owners. They based their claim on their conduct- they removed weeds and grasses by discing the property two to three times a year, posted a “for Sale” sign near (but not on) the property; and paid all the property taxes.

The court of appeal listed the requirements for showing adverse possession but then noted that, where adverse possession is asserted against a cotenant, additional principles apply. As each cotenant has a right to possess, and the possession of one is deemed the possession of all,, each may assume that a possessor IS possessing for all. Thus the Possessor must show an ouster of the cotenant- strong evidence that shows they brought home to the cotenant that he intends to oust the cotenant. The evidence must be of acts of ownership of the “most open, notorious and unequivocal character.” Whether ouster has been established is a question of law, not of fact, for the judge and not for a jury to decide.

Occasionally an owner conveys property without reserving an express or written easement to continue using the property for purposes related to an adjoining parcel. Most often the easement is for access to the adjoining property. In such cases, the courts determine if there should be an “implied easement.”

An implied easement requires the following conditions:

1. The owner conveys all or a portion of their property;

California courts have generally provided for equitable easements, in cases in which three factors are present:

1. The party needing the easement is innocent , that is not willful or negligent.

2. where adverse possession and prescriptive easement rules do not apply; Adverse possession require unless the rights of the public would be harmed, the court will allow it if the party needing the easement would otherwise be irreparably harmed, regardless of the injury to the other party; and 3. The hardship to the party needed the easement must be greatly disproportionate to the hardship faced by the other party and this fact must clearly appear in the evidence.

I noted in a prior real estate law blog what the steps the government must go through to take property through an eminent domain proceeding. A recent court decision reported by Rick Daysog in Sacramento County requiring the city of Rancho Cordova to pay the Lily Co. $7.9 million for its property illustrates the variation that can occur in determining fair market value.

First off, both the California and U.S. Constitutions require that parties that lose their property to an eminent domain proceeding receive just compensation. This compensation will place the owner in the same economic position that he would have occupied had the property not been taken. However, the property is not valued as to its worth to the owner or government, but what it is worth in the marketplace. Fair market value is the highest price a willing buyer would pay a willing seller, where neither party is under any particular necessity nor rush to do so, and who have full knowledge of all the possible uses of the property. Special value to the owner is not considered. Arguing fair market value with the agency often requires the owner get their own appraisal and consult with an experienced Sacramento real estate lawyer.

The fair market value cannot include any change due to the government project. For example, a new sports arena may increase the value of nearby land, but the government’s plan to build one is not taken into consideration in determining value.