Contract Review and Preparation

Broker Involvement is a Key Exemption to California's Usury Law

What is "usury", and how are you protected from it? In making of loans to conventional real estate buyers and "flippers", investors should remember that for most private transactions, California enforces its usury law against excessive interest charges, with certain exemptions for seller carry back loans, and loans "made or arranged" by a licensed broker. Usury is defined as charging a rate of interest in excess of the [more]

Expert Testimony Requires the Correct Analysis

How effective can an expert witness be in determining the outcome of your real estate lawsuit? Even if the homeowner has the only expert witness regarding damages in an eminent domain action, that testimony needs to be grounded in a proper interpretation of the law, or it will be barred, and the homeowner will not recover any damages in excess of the fair market value of the house. This rule was applied in the recent [more]

A Real Property Co-Ownership Agreement Can Reduce Disputes

Real estate investor partners: Is your word good enough? With prices appreciating, and loan rates and inventory low, there is an increased willingness to own real property by two or more investors who need to combine their capital and/or credit to participate in buying, and flipping or renting the property.  Often, the investors' focus is on selecting the property or raising the down payment, with little or no [more]

Who's At Fault When a Real Estate Transaction Doesn't Close? Section 3543 May Be A Tie-Breaker

With Deception, Comes Consequence For transactions with a middleman that deceives both the seller and buyer, section 3543 of California's Civil Code can break the tie where both parties are negligent, stating where one of two innocent persons must suffer by the act of a third (i.e., middleman), he, by whose negligence it happened, must be the sufferer. Huh? What does not mean in simple English? In other words, if both [more]

Legal Documents: How You Sign is as important as What You Sign

What is your liability when signing legal documents? Legal documents are frequently prepared by the professionals involved in the transaction, such as escrow or title companies, but it is important that the signer of  the documents carefully review the manner in which the signer's name is set forth on the documents, and in what capacity he signs the documents, especially if the party to the transaction is a legal entity [more]

Be Prepared! Understanding Your Estate Plan

BASIC PARTS OF ESTATE PLAN Revocable Trust; Last Will ("Pour Over Will) Durable Power of Attorney - Financial Advance Health Care Directive Grant and Assignment Family Trust Trustees' Certification of Trust. REVOCABLE TRUST:   Distributes Trust assets without the necessity to obtain court approval  (which is necessary to probate a will).  However, application to the court is still possible.  Until [more]

HAMP Agreements Are Enforceable

Government Mortgage Program Allows Recourse Against Lenders For Compliant Homeowners The Home Affordable Mortgage Program (HAMP) was started in 2009 to help homeowners avoid foreclosure, and its goal is to provide lower monthly payments to borrowers who have defaulted on their payments, or who are likely to default. It has been extended to December 31, 2015 and the requirements relaxed to encourage more applications. A [more]

Taking the Mystery Out of Short Sales

Q: The value of my residence is less than the amount that I owe on the mortgage, and because I lost my job, I cannot continue to make the loan payments. Do I have any option other than losing the property to foreclosure? A: Given the one‐two punch of falling property values and increasing unemployment, the number of homes with debt that exceeds their value, and the owners inability to keep payments current, have [more]

Upper Land Owners Must be Reasonable in Diverting Surface Water

Q: With the recent fire in the hills where I reside, and the rains that have caused severe mud slides that appear to be heading my way, how can I protect my property and not get sued by the lower owners? A: In California, water that is diffused over the surface of the land and resulting from rain, snow, or springs is known as "surface water". The mud flows from burn areas are caused by heavy rains on the denuded [more]

Protection of California’s Anti-Deficiency Law Depends Upon the Lender and the Type of Loan

Q: I obtained a loan to purchase my single family residence in 2002 from Bank 1, and then I obtained a line of credit secured by a second deed of trust on my residence in 2005 from Bank 2. Although I remain employed, the value of my property is less than the amount I owe on both loans and I have stopped paying the mortgages. If Bank 1 forecloses on its loan to me, will I still be liable for the amount I owe to Bank 2 [more]

Overhanging Branches from a Neighbor’s Tree Can Be Cut

Q: My neighbor's camphor tree has branches that overhang the wall between our properties, and its roots are extending into my yard and damaging both the wall and my patio deck. Can I cut the branches and roots and bill my neighbor? A: With recent developers positioning houses very close to the property lines to maximize the number of houses in the development, it is more common for branches and roots of a tree to [more]

Hostile Use of Land Can Create a Prescriptive Easement and Loss of Exclusive Use

Q: For a long time, my neighbor has used a trail across my backyard, even though I repeatedly told him he was trespassing. He recently told me that he would continue to use the trail and there was nothing I could do about it. Is he right, and what can I do to prevent his use of the trail? A: There are many types of real property concepts that have continued since the middle ages, but a prescriptive easement is one of [more]

Every Owner Should Record a Homestead Declaration to Protect Equity in a Residence from Creditors

Q: I own my residence with my wife and a friend mentioned that I should record something called a declaration of homestead because I have been sued and a judgment may be entered against me, but I do not know what it is, how to prepare it, or what benefit it may provide to me. Should I prepare and record a homestead declaration and what do I need to do to have it become effective? A: So long as the statutory [more]

A 1031 Tax Deferred Exchange Can Delay Payment of the Taxes Owed On the Sale and Subsequent Purchase of Business and Investment Property

Q:  I have a residence that I have been renting and I want to sell it, delay payment of the capital gain tax, and then purchase an office building.  Can I use a 1031 tax deferred exchange to delay payment of the tax I would otherwise have to pay? A:  Subject to the extensive tax code and rules and regulations of the IRS, the use of an exchange of property under section 1031 of the tax code should be considered as a [more]

The Basics of Security Deposits for Residential Rentals

Q: I recently purchased a second home with the intention to rent it, but I do not know how much I can charge as a security deposit, or the procedure I should follow in accounting for the security deposit after the tenancy ends. Can you provide me with the basic information I need to follow regarding security deposits? A: Security deposits on residential rental property are governed primarily by California's Civil Code, [more]

Responsibility for Tenant During Escrow

Q: As a broker representing a seller of a single family home who has been leasing the property, what should I be aware of during the sale transaction and how can I ensure that my client will not have any legal issues with the buyer regarding the tenant? A: A property that is listed for sale when occupied by one or more tenants presents special issues that must be recognized and addressed during the negotiations [more]

A Public Adjuster Can Assist on Property Claims

Q:  The heavy rains this winter severely damaged the roof and interior of my house and although I have insurance coverage, how can I be sure that I recover all of the benefits I am entitled to under my insurance? A:  After a claim is reported to an insurance company, it will conduct an investigation to determine whether the claim is covered under the policy, and the nature and extent of benefits the policy holder is [more]

A Homeowner Can Recover all Compensation Paid to an Unlicensed Contractor, Even if the Homeowner Knew the Contractor Did Not Have a License

Q: I hired a landscaper knowing he did not have a contractor's license and after I paid for several months of work at my house, I want to terminate the contract and recover all of the compensation I paid the landscaper. Can I retain the benefits of the work performed and also recover the amount I paid the landscaper, even though I knew he was unlicensed when I hired him? A: Yes, although it seems unfair that a [more]

There Are Four Basic Forms of Ownership of Real Property and Each Have Unique Characteristics

Q:   Because my wife and I cannot afford the down payment on our first residence by ourselves, her father has offered to provide 100% of the down payment so long as he is a co-owner of the property and can share in any appreciation in value of the property, and we make all of the mortgage payments.  What options do we have in specifying how the grant deed to the property should be prepared to provide my father-in-law with [more]

The Real Property Scalpel: A Quiet Title Action

Q:  I need to sell my house with a short sale because I can no longer afford to pay the mortgage.  But there is a cloud on the title in the form of a deed of trust that I paid off long ago to my brother, and he refuses to have the deed removed from the title.  What can I do to get the title cleared of my brother's deed so I can complete the short sale? A:  If the class action is a butcher's cleaver, then the quiet title [more]

Contingencies in the Sale Transaction Are an Important Right of a Buyer

Q: I am a first time home buyer and my agent mentioned that I may want to request "contingencies" in addition to those provided in the standard residential purchase agreement because of the characteristics of the type of homes we have been researching. What are contingencies and what should I consider in determining which contingencies to include in my offer? A: Contingencies in contract law is a right of one of the [more]

Both a Seller and Buyer Benefit from Retaining the Services of a Licensed Broker

Q:   I am considering selling my home and then purchasing a new home.  Because of the amount of information I can obtain on the internet about selling and buying real property, do I really need a broker who I will have to pay a commission to? A:  It is not uncommon for many sellers and buyers of real property to have misconceived notions about the utility of using a broker to handle the selling and buying of real [more]

A Buyer is Owed a Limited Duty of Inspection and Disclosure by Both the Seller’s Agent and His Own Agent

Q:        I purchased a home that has a pool and the seller's agent informed me that there did not appear to be any visual defects, and my own agent told me that he was not aware of any problems with the pool that I should insist on being repaired before the close of escrow, even though the pool was only half full of very dirty water and it did not appear to have the filter equipment operating for some time.  I did [more]

A Buyer Has Remedies if a Seller Refuses to Execute an Escrow Amendment for Return of the Buyer's Deposit

Q:   I entered into a residential purchase agreement and during the contingency period, I determined that I would not be able to develop the property the way I want to because of the zoning restrictions.  I gave timely notice to the seller of the exercise of my right to cancel the agreement, but the seller has refused to sign the document the escrow company says it needs to cancel the escrow and return my deposit.  What [more]