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Real Estate Litigation

Hidden Hazards: The Thomases’ Battle with Unpermitted Structures and Past Violations.

July 12, 2024 | By

Imagine purchasing your dream property only to be blindsided by fines and legal battles over issues you didn’t create. This is the reality for the Thomases in Humboldt County, California. After buying a property unknowingly used for illegal cannabis cultivation by previous owners, they now face at least $1 million in fines due to an unpermitted structure. This case underscores the critical importance of thorough property investigations before buying, as hidden violations can lead to significant financial and legal consequences for new homeowners.

Background

In 2019, Humboldt County’s code enforcement department raided the property in Miranda, an unincorporated community, and shut down an illegal cannabis operation. The then-owners were cited for unlicensed cultivation and having an unpermitted structure, leading to an administrative penalty of $12,000 over 90 days.

Six days …

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Posted In: Blog, Failure to Disclose, Real Estate Litigation

Court Strikes Down Excessive Default Interest Penalties: What Borrowers Need to Know

July 8, 2024 | By

In a landmark decision that has significant implications for borrowers, the California Court of Appeal in Honchariw v. FJM Private Mortgage Fund, LLC ruled that excessive default interest and late fees in non-consumer loans can be deemed unenforceable penalties. This ruling serves as a critical reminder for borrowers to be vigilant about the terms of their loan agreements and offers a pathway to challenge unfair penalty provisions.

Case Background

Nicholas and Sharon Honchariw borrowed $5.6 million from FJM Private Mortgage Fund, LLC, secured by commercial real estate. Their loan agreement included an interest rate of 8.5% per annum, a 10% late fee on missed payments, and a default interest rate that increased to 18.49% upon any default. When the Honchariws missed a payment of $39,667 on September 1, 2019, these …

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Posted In: Blog, Mortgage Litigation, Real Estate Litigation

Buyer Beware: Court Upholds Broker’s Commission Claim in Real Estate Dispute

July 1, 2024 | By
Court Upholds Broker's Commission Claim in Real Estate Dispute

In Chan v. Tsang, the California Court of Appeal examined whether a buyer’s broker can recover a commission from a buyer who unjustifiably refuses to complete a real estate transaction. The court determined that the buyer was responsible for paying the broker $100,000, the commission that would have been earned from the seller if the buyer had fulfilled the purchase agreement.

Tsang (the Buyer) expressed interest to Chan (the Broker) in purchasing commercial property. The Broker introduced the Buyer to a property owned by Mountain View Center Associates (the Seller). The Seller accepted the Buyer’s offer of $4 million, with the Broker’s commission set at $100,000.

However, the Buyer later backed out of the deal without any valid reason. This led to lawsuits between the Seller, the …

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Posted In: Blog, Broker/Agent Liability, Real Estate Litigation

Understanding Partition Actions in California: A Guide for Co-Tenants

May 30, 2024 | By

In California, partition actions are a common legal remedy for co-owners who want to end their shared ownership of a property. This process can lead to either the sale of the property and division of the proceeds, or the physical division of the property into separate parcels.

This article will guide you through what a partition action entails, especially focusing on how co-owners can manage improvements and repairs to the property. We’ll delve into the rights and responsibilities of co-tenants, how to claim reimbursement for property enhancements, and the intricacies of handling these situations in court.

The Partition Action

In California, a partition action is a civil procedure used by a co-owner to end joint ownership of a property. This can result in either the sale of the property and …

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Posted In: Blog, Partition Actions, Real Estate Litigation

Common Liens and Judgments

May 23, 2024 | By

Property liens are legal claims that are placed on a piece of real estate (Real Property). They are usually the result of debts that the property owner owes. For example, if a homeowner fails to pay their property tax, the government can put a tax lien on the homeowner’s property.

When a property has a lien,  it means that there is a barrier to selling the property.

The homeowner cannot sell their home unless the lien is removed. In some cases, property liens can even lead to foreclosure. For instance, if a homeowner fails to pay their mortgage, the lender can take possession of the house and sell it to pay off the debt.

There are different types of property liens. They can be either general or specific, and voluntary …

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Posted In: Blog, Foreclosure, Real Estate Litigation

Understanding Foreclosure: A HANDY REFERENCE GUIDE

May 21, 2024 | By

What is Foreclosure?

When a homeowner fails to make the payments due on their home loan, the mortgage company can ‘foreclose’. This means that the lender can force a sale of the home to pay for the outstanding balance of the loan.

Timeline of a Foreclosure

Day 1 You are in default two days after your payment is due.
Day 32 You have now missed two monthly payments.
 

Day 32-90

 Sometime during this period you will receive a letter stating that the Notice of Default (NOD) has been recorded. The speed with which lenders send NOD depends on the policy of each individual lender.
 

NOD Recorded

 From this day, the next 90 days is a silent period. You have this time to pay all back payments, fees, and other charges
…
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Posted In: Blog, Foreclosure, Real Estate Litigation

Quiet Title Actions Explained

May 20, 2024 | By

The purpose of a quiet title action is to establish title against adverse claims to real property or any interest in the property. [Code Civ. Proc. §760.020] The remedy of quiet title can be combined with other causes of action or other remedies. In an action or proceeding in which establishing or quieting title to property is in issue, the court may, in its discretion and on the motion of any party, require that the issue be resolved pursuant to the Code Civ. Proc. provisions relating to quiet title actions. [Code Civ. Proc. §760.030]

Jurisdiction

A quiet title action must be brought in the superior court of the county in which the real property is located. Once the action is before the court, the court has complete power to determine …

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Posted In: Blog, Quiet Title Actions, Real Estate Litigation

Equitable Easements in California: Insights from Romero v. Shih

May 17, 2024 | By

In the notable case of Romero v. Shih, the California Court of Appeal dealt with a failed lot line adjustment and its transformation into an equitable easement, providing a significant learning point for legal professionals, especially those in real estate and property law.

Background of the Case

The case revolved around two adjacent residential lots that had been under the same ownership since 1941. An attempt was made to adjust the lot lines to prevent practical issues with a driveway on the narrower lot. Despite initiating the process, including obtaining a zoning variance and preparing a new map, the adjustment was never formally recorded. This oversight led to subsequent ownership disputes when the lots were sold, using the original legal descriptions, and new owners found discrepancies in the lot …

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Posted In: Blog, Easement and Encroachment Actions, Real Estate Litigation

Understanding Easements and Resolving Neighbor Disputes

April 26, 2024 | By

The old American adage is “good fences make good neighbors,” but at times there are property boundary disputes between neighbors when the fence does not track the actual property boundary. When these conflicts occur, understanding the legal nuances of property rights becomes essential. Here’s a clearer look into adverse possession, prescriptive easements, equitable easements, and how disputes, especially those involving trees, are managed.

Adverse Possession: A Rare Occurrence

First year law students are often surprised when they learn that if a “squatter” occupies land in a manner that is (1) under a claim of right, (2) actual, open and notorious giving reasonable notice to the true owner, (3) hostile to the true owner, (4) continuous for a period of at least five years and (5) payment of property taxes on …

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Posted In: Blog, Easement and Encroachment Actions, Real Estate Litigation

The Most Frequent Lawsuits Against Brokers

January 14, 2024 | By
The Most Frequent Lawsuits Against Brokers

Introduction:

When it comes to selling a residential property with one to four units, the seller has a legal obligation to disclose known material information affecting the value or desirability of the property. This is typically done through a Real Estate Transfer Disclosure Statement (C.A.R. Form TDS) and a Seller Property Questionnaire (C.A.R. Form SPQ). Additionally, a natural hazards (NHD) report can be ordered from a third-party company to identify any hazards in the property’s location. In this article, we’ll discuss the duty to disclose, how to modify a disclosure, and the buyer’s right to rescind if the disclosures are made after an offer has been made.

Duty to Disclose:

As mentioned, the seller of a residential property has a legal obligation to disclose known material information that could affect …

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Posted In: Blog, Broker/Agent Liability, Real Estate Litigation

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