CARealEstateLaw

• How to tank recovery in CA RE –
  HOLD ONTO YOUR WALLET: BIG TAX HIKE PROPOSALS IN THE STATE CAPITOLRequired Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.  An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.
• No more “privacy” when it comes to transfer tax in CA
  The custom and standard in commercial real estate in California is to have the deed state something like: “In accordance with Section 111932 of the California Revenue and Taxation Code, Grantor has declared the amount of the transfer tax which is due, DTT not of public record.”  This makes it so that the purchase price cannot be computed from the amount of the transfer tax paid.  The formula for transfer tax in California is: $.55 per $500 of purchase price.  The purchase price is rounded to the nearest $500, then divided by $500, then multiplied by $.55 to compute the tax amount.  When the parties desire NOT to have this purchase price made public, they include the “non-public” election mentioned above.  Starting January 1, 2015, this option is no longer available meaning that all deeds will show the transfer tax and the public will be able to compute the purchase price based upon the above formula.  This is still not a “mindless” computation, however, in that the tax is on the “new value”.  If the “purchase price” is $1,000,000 but is taken subject to a $1,000,000 existing first loan, then the “value” of that property would be $2,000,000 even though the tax would be computed on $1,000,000.  See: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB1888 Some counties and cities impose additional transfer taxes, not all of which provide a reduction for the “continuing liens,” so further care is warranted.  See also California Real Property journal, Vol. 23, No. 2, A Practical Guide to Transfer Taxes in California by Dena Cruz and Scott Rogers which is a detailed analysis of the transfer tax issue.  It was published in 2005, so check the current statutes before relying on it.Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.  An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.
• Be careful in hiring.
  “Like an archer who wounds everyone is one who hires a passing fool or drunkard.” (Proverbs 26:10 ESV).Someone once said, “Marry in haste, repent at leisure.”  This could easily be adapted to hiring employees: “Hire in haste, repent at leisure.” If you make someone an archer who doesn’t care about who he wounds, he might kill your own people or innocents as well as the enemy. Skill in shooting is not enough. The competence in shooting must be matched with the character and judgment to do what is right. PASSING implies that the hirer did not take the time to learn the character of the one he hired. He just hopes he isn’t hiring a fool or a drunkard. An employer must be careful in hiring. The customer typically equates the character of the employer with that of the employee. If the customer trusts the employer, they may also trust the employee. If that trust is broken, whether by a breakdown of competence or character, then the customer will ascribe that defect/offense to the employer who did the hiring. Take time to examine competence and character before hiring and monitor them as time goes on to make sure problems don’t arise. If you realize that you have hired “an archer who wounds everyone,” act quickly and decisively.Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.  An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.
• Game Theory in Contract Drafting
  I participate in a Mac user group for attorneys.  One of the participants asked about the use of game theory in the practice of law.  Here are my posts and follow up answers:I use game theory, of sorts, by using “baseball arbitration” when I use an arbitration clauses.  With baseball arbitration, each party (lets call them “Buyer” and “Seller”) appoints an appraiser to come up with a value, and a third “independent” appraiser is also retained.  The “final” price for the property is either the Buyer’s appraised value or the Seller’s appraised value depending upon which one is closer to the third party appraiser’s value.  In this way, each party have an incentive to be realistic if not conservative in its valuation (a Buyer won’t go too low and a Seller won’t go too high).  If they do, the other party’s value will be chosen as the final price.  For instance, let’s say the Buyer’s appraised value is $1 mil. and the Seller’s appraised value is $2 mil.  If the appraiser comes in at $1.7 mil, the Seller’s $2 mil. becomes the price.  In the face of this, the Buyer has an incentive to come up with a higher value, and the Seller has an incentive to come up with a lower value since they don’t know what the third party appraiser will do.  I find this beneficial because if the parties are close enough after their first two appraisals come in, they might just elect to forego the third appraiser and agree on a value.  In any event, it tends to reduce the chances of wild discrepancies.  I also try to correctly analyze incentives in creating contracts and attempt to incentivize the desired outcomes.  As for a particular book that influenced me, depending upon how you look at it, it is the entire field of economics, or law and economics, but the concepts are well written in many books on negotiation, business and other disciplines.  Posner is a good one to read if you can wade through it:  https://www.law.uchicago.edu/files/files/53.Posner.Values_0.pdfor https://www.amazon.com/Economic-Analysis-Law-Richard-Posner/dp/0735563543/ref=sr_1_2?s=books&ie=UTF8&qid=1394497043&sr=1-2&keywords=economic+analysis+of+lawSomeone from the group emailed me and asked for some sample language of the baseball arbitration, and I posted:”If the BUYER has elected to have the then-current fair market value of the SELLER Parcel determined by appraisal, the value will be determined by three appraisers, one appointed by SELLER, one appointed by BUYER, and the third selected by the other two appraisers (hereinafter respectively “SELLER Appraiser,” “BUYER Appraiser,” “Third Appraiser,” and collectively the “Appraisers”).  Each of the Appraisers must be an MAI appraiser who is certified by the State of California, with at least 10 year’s experience in appraising businesses.  Within five (5) days of BUYER’s notice of its election to have the then-current fair market value of the SELLER Parcel determined by appraisal, BUYER and SELLER shall exchange the names of its respective appraiser, and those two appraisers shall select the Third Appraiser within ten (10) days thereafter.  If the SELLER Appraiser and the BUYER Appraiser cannot agree upon the Third Appraiser, then either party may apply to the Southern California Chapter of the Appraisal Institute for appointment of the Third Appraiser (or if no procedure then exists for such application, to the then-presiding Judge of the Superior Court of the State of California, in and for the County of San Bernardino, Central Branch).  Within thirty (30) days of the appointment of the Third Appraiser, each of the Appraisers shall complete an appraisal of SELLER’s Parcel to designate each of the Appraisers’ opinion of the fair market value, as of the date of the Exercise Notice, of the SELLER Parcel, as fully improved, using the Uniform Standards of Professional Appraisal Practice of the Appraisal Institute.  None of the three Appraisers shall share their opinion of value with any of the others, and the Appraisers shall confirm by telephone that they will deliver (by overnight delivery with proof of receipt) their respective appraisal on each other, SELLER and BUYER on a particular day not later than thirty-five (35) days after the appointment of the Third Appraiser.  The final price of the SELLER Parcel shall be either the appraised value of the SELLER Appraiser or the BUYER Appraiser, depending upon which of those appraisals is closest in value to that of the Third Appraiser.  In the event that the Third Appraiser’s opinion of value is: a) exactly between the other two; or b) greater than that of the SELLER Appraiser; or c) less than that of the BUYER Appraiser, then the Third Appraiser’s valuation shall be the final price of the SELLER Parcel, subject to the following minimum valuation.  In no event shall the fair market value of the SELLER Parcel be less than SELLER’s undepreciated cost basis in that property, including all acquisition, construction, development, permit, professional, costs, fees and expenses.”This is a bit different from the clause I described above and would need to be modified to allow for the possibility for the parties to come to agreement before the third party appraiser is chosen.  Also, this version increases  risk from being the odd appraiser out in that the floor and the caps are removed.  For example, with this clause, if the third party appraiser is higher than the Seller’s price, the third party appraiser’s value becomes the price.  Anything that increases the risk of having your appraisal NOT chosen creates an incentive to be very conservative in your valuation.  Another difference is that this provides for a floor price which the Seller cannot be required to sell below.  If I were drafting this today, I think that I would make the changes to make the clause look more like what I described yesterday, but each case is different.  You have to look at the transaction, the desired results, undesirable results and the incentives created by the agreements and the circumstances.  It is also good to draft it, walk away, look at it again, and look at it with the different markets you might face when the clause is exercised.  For example, does the clause work in an increasing market, a decreasing market, when the capital markets are flowing and loans are available, when not, etc.?  You can also consider particular clients.  For example, if you have a client that is so well financed that they could always cash out an obligation, that is treated differently than a client that finds it hard to pay their line of credit down to zero every year to meet the financial covenants of that loan. Disclaimer: This web site is specifically for attorneys and is designed for general information only. The information presented above should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.  The above must be interpreted by a an attorney licensed in the jurisdiction it is to be used in.
• Ambiguous Letters of Intent
  I have received questions over the years from clients relating to the status of their relationship with a potential buyer or seller of property where there was a signed “letter of intent” followed by some “due diligence” investigation, etc.  With real property, the contract must be in writing in order to be enforceable under California law, however, there are exceptions to this where there has been substantial part performance by one party or where there was substantial money spent on due diligence or other items in reliance on a verbal agreement.  Also, one party might claim that the other party cannot break off negotiations because of the “covenant of good faith and fair dealing” which might require a party to continue negotiating in good faith.  All of these theories, while they might be very difficult for a disgruntled party to actually prevail on, could lead to lawsuits, attorneys, delays, and in the case of a claim against a seller of real property, a lis pendens recorded against the property which could prevent it from being sold to a third party.I believe that it is a good idea to have the general terms agreed to by the parties before money and time is spent on drafting contracts since you will sometimes learn of fundamental flaws in the deal early enough to save these costs, and it is easier to negotiate on 5-7 conceptual bullet points than it is to draft a lengthy contract.  One of the most common problems with letters of intent, however, is ambiguity.  Is it an offer or is it a non-binding letter of intent?  Many letters will contain elements of both which create the ambiguity.  For instance, a letter could state: “this letter is subject to additional terms to be contained in a final contract,” indicating that it is a non-binding letter of intent.  The same letter could conclude with the phrase, “this letter will be deemed rejected if not accepted by 5:00 p.m. on September ___, 2013.”  This is language of offer and acceptance, i.e. contract, not non-binding letter of intent.  Where a letter containing this type of ambiguity is signed, followed by substantial reliance or due diligence by a party, it could lead to litigation or other unpleasantness.Where a deal is small and it is not anticipated that there will be much, if any, money or effort spent on due diligence before a contract is executed, a clause something like the following may be used to clarify the non-binding nature of the letter agreement: “This letter may form the basis of further purchase discussions, but it is not an offer capable of being accepted.  If you believe the terms outlined in this letter are acceptable, please let me know so the final terms can be included in a written agreement which will be effective only when executed by the parties.”  Of course, you have to make sure that the rest of the letter doesn’t conflict with this statement as mentioned above.  Where a deal is larger, or it is anticipated that the parties could spend a lot on due diligence before entering into a final contract, a more formal letter of intent is prudent.  For instance, some non-binding letters of intent will have “binding” portions, like confidentiality and insurance and indemnity for pre-contract “due diligence.”  This type of partially binding/partially non-binding letter of intent is usually best drafted, or at least reviewed, by an attorney, especially where the dollar values are high.  Although this focuses on real property transactions, similar principals apply to transactions involving asset purchases, stock sale or other transactions. Here are other samples of non-binding letter of intent provisions, again, subject to the warnings above re: using ambiguous terms:Option 1This letter may form the basis of further settlement discussions, but it is not an offer capable of being accepted.  If you believe the terms outlined herein are acceptable, please let me know so I may reduce them to a ***contract or  settlement and release agreement***.  Nothing in this letter will be admissible in litigation pursuant to California Evidence Code §§ 1152 and 1154 and Rule408 of the Federal Rules of Evidence.Option 2            This letter may form the basis of further settlement discussions, but it is not an offer capable of being accepted.  If you believe the terms outlined herein are acceptable, please let me know so our attorneys can write them into a ***contract or  settlement and release agreement*** which will only be effective when executed by all parties.  Nothing in this letter will be admissible in litigation pursuant to California Evidence Code §§ 1152 and 1154 and Rule 408 of the Federal Rules of Evidence.Option 3This letter may form the basis of further purchase discussions, but it is not an offer capable of being accepted.  If you believe the terms outlined in this letter are acceptable, please let me know so the final terms can be included in a written agreement which will be effective only when executed by the parties and approved by ______________, as necessary. [when third party approval is also necessary]For the mutual protection of both of our clients, neither party will be bound until final written agreement is prepared and executed by the parties.  This letter may form the basis of further purchase discussions, but it is not an offer capable of being accepted.  If you believe the terms outlined in this letter are acceptable, please let me know so that we may prepare a formal ***contract or  settlement and release agreement***.  My client is interested in arriving at a mutually acceptable understanding as quickly as possible.  I look forward to your response.Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.
• Lunch Presentation to Christian Club at Loyola Law School (Part 3)
  Practical 2:Please God not man”I tell you, my friends, do not fear those who kill the body, and after that have nothing more that they can do. But I will warn you whom to fear: fear him who, after he has killed, has authority to cast into hell. Yes, I tell you, fear him! Are not five sparrows sold for two pennies? And not one of them is forgotten before God. Why, even the hairs of your head are all numbered. Fear not; you are of more value than many sparrows.”(Luke 12:4-9 ESV). In business I have found that putting too much stock, one way or another, in the affirmation or condemnation of another person is a snare. Praise of people can be addicting. If you don’t keep it in perspective, then you do things that are not appropriate to continue receiving praise. In some cases that can be really bad like violating ethics or the law. It would never start out like that. It would usually start out with much smaller issues, like preferring a client’s project goals above those of other clients, your own family and/or your own health when the objectively situation does not require or warrant it. Putting too much stock in the criticism of another person, will equally be a snare.Objectively listen to and consider the criticism of other people.  Any messenger, even one who is very unpleasant, may have something that I need to hear. That unpleasant, angering, even exasperating person can be more loving to/positive for me than those who manipulatively flatter or who genuinely like me but don’t care/risk enough to point out my flaws.”Better is open rebuke than hidden love. Faithful are the wounds of a friend; profuse are the kisses of an enemy.” (Proverbs 27:5, 6 ESV).Only the fool rejects correction which is needed, whether that correction manifests itself in through the conviction of a Bible passage, the Spirit of God through prayer, circumstances or people. The one who persists in that rejection does so at his peril. “A man who remains stiff-necked after many rebukes will suddenly be destroyed—without remedy.” (Proverbs 29:1 NIV84).             Rather than focusing on the roller coaster of the opinions of others, I have found it more healthy to focus on pleasing God, from whom we can receive genuine, untainted approval that matters:”His master said to him, ‘Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master.'”(Matthew 25:21 ESV).Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.  An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.
• Lunch Presentation to Christian Club at Loyola Law School (Part 2)
  Practical Point 1: Go meal to meal.One of the toughest physical challenges a person to go through is hell week for SEALs.  Chris Kyle, a SEAL sniper wrote that the best way to get through hell weak is to go meal to meal.  They fed them every 6 hours, so relief was never more than 5 hours and 59 minutes away.  His point was that if you focus on what’s coming tomorrow or the next day, week, month or year, you’ll get freaked out and want to quit.Matt. 6:25-34 says: “25“For this reason I say to you, do not be worried about your life, as to what you will eat or what you will drink; nor for your body, as to what you will put on. Is not life more than food, and the body more than clothing?26“Look at the birds of the air, that they do not sow, nor reap nor gather into barns, and yet your heavenly Father feeds them. Are you not worth much more than they?27“And who of you by being worried can add a single hour to his life?28“And why are you worried about clothing? Observe how the lilies of the field grow; they do not toil nor do they spin,29yet I say to you that not even Solomon in all his glory clothed himself like one of these.30“But if God so clothes the grass of the field, which is alive today and tomorrow is thrown into the furnace, will He not much more clothe you? You of little faith!31“Do not worry then, saying, ‘What will we eat?’ or ‘What will we drink?’ or ‘What will we wear for clothing?’32“For the Gentiles eagerly seek all these things; for your heavenly Father knows that you need all these things.33“But seek first His kingdom and His righteousness, and all these things will be added to you. 34“So do not worry about tomorrow; for tomorrow will care for itself. Each day has enough trouble of its own.”  Law School, the bar and much of life is more stress control, perseverance and time management vs. intellect and raw knowledge.Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.  An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.
• Lunch Presentation to Christian Club at Loyola Law School (Part 1)
  Three thoughts which I wish had been shared with me when I was going to school here, one more theoretical, and two practical.Theoretical:What on earth are you here for?Pursuit of pleasure, he who dies with the most toys wins, great and noble achievements. 3,000 years ago, King Solomon explored all of these purposes and declared them “meaningless” and many modern non-Christian observers are reaching the same conclusions.Rick Warren wrote Purpose Driven Life, subtitled “What on Earth am I here For?” Biblical perspective of our purpose in life I want to focus on day 31, under “SHAPE: Employing Your Experiences:”“God never wastes a hurt! In fact your greatest ministry will most likely come out of your greatest hurt. …God intentionally allows you to go through painful experiences to equip you for ministry to others. The Bible says, “He comforts us in all our troubles so that we can comfort others. When others are troubled, we will be able to give them the same comfort God has given us.” If you really desire to be used by God, you must understand a powerful truth: The very experiences that you have resented or regretted most in life – the ones you’ve wanted to hide and forget- are the experiences God wants to use to help others. They are your ministry…”“10 For we are God’s workmanship, created in Christ Jesus to do good works, which God prepared in advance for us to do.” Eph 2:10. In Greek, the word workmanship is: “Poiema” from which we get the word “poem” From this passage, we learn that we are created by God as a wonderful work of art for the purpose of doing some good works that he has laid out for us.Diligently seek what the Lord wants you to do with your life. Not what your parents or other people want you to do. It will be framed by the Bible, but it will be intimate and personal as is our Lord.Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.  An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.
• Sufficient Legal Descriptions
  An estate planning attorney recently wrote me with this question: “Hi Kevin! Are title insurance companies happy to have a simple legal such as Map #0001, Parcel 0202 as opposed to a more extensive legal description?” Here is my answer: “I’ve got kind of a roundabout answer and some practical suggestions. First, real estate law is what the title companies say it is. From a practical standpoint, whether a title company underwriter is correct or not, the decision he or she makes is, for practical purposes the law. Sometimes we can persuade the underwriter to come to a different conclusion, or get a different underwriter from another title company to make a different underwriting decision, or pay more money for an endorsement of some sort, but the title company has the final say, and if we don’t like it, then the remedy is to file a quite title action or probate or whatever we need to do to get a court order. This is a very bad result for a client. I am assuming that you are asking for the purpose of funding trusts. One way of doing this is to get the copy of the deed vesting title to the client when the FIRST purchased it an use that. It is also good to compare that legal to the last deed of trust (to a non-private lender) to see if those legals match. If they do, then you have a reasonable assurance that the legal is correct. I would recommend against shortening or interpreting that legal, and where possible, cut and paste rather than retyping. If you do have to retype, then have one person read the legal description to another person who will check it against what is written. Legals can be mind-numbing, and it helps to have two people involved in this process. This method gives you a high decree of success that you have gotten it right, but it is not insurance. Also, it is susceptible to garbage in, garbage out if the first legal was not accurate. As far as whether this method is above or below the standard of care for an estate planning attorney, I don’t know. The best way that I have seen this done is to have the client bring in the title policy from when they purchased the property, then send the proposed deed (using the legal in the title policy) to the same title company with a request that you want them to issue a 107.9 endorsement to that title policy. There may be a charge for the endorsement of +/- $150, but it is INSURANCE in the event of an error in that legal description. This would likely not only meet the standard of care, it also caries insurance as to the amount of the original policy. The endorsement will only ADD the trust as an insured under the original policy, but it does not insure anything that has happened to the title AFTER the date of the policy. If the client wants that, then they will likely have to purchase a new policy. If the client is planning on selling the property within the next 2-3 years, then I recommend that the client spend the money on a new policy and that they pay an extra premium for a “binder” which then can be used in the subsequent sale. The reason for this is that you pick up the additional coverage, but you also learn sooner rather than later about potential problems with the title which need to be resolved prior to selling it. Time is a big plus in solving title problems. As to the real legal answer to your question on the sufficiency of a legal description for the deed, See, Miller and Starr, California Real Estate 3rd Section 11:13 (2004): “Description required. In order to give constructive notice, the instrument must contain a description of the real property sufficient to identify it, or it must refer to another recorded document that contains an adequate description. Adequacy of the description. Minor imperfections in the description do not defeat the notice given by recordation of the instrument as long as the property is clearly identifiable and the instrument provides enough information that an examination of the public records or the referenced documents will provide the subsequent party with knowledge of the correct description or property. However, where the property cannot be clearly identified, the instrument does not constitute constructive notice. When extrinsic evidence is admitted to explain an ambiguous description, adequacy of the description is a question of fact, but when the adequacy or inadequacy appears on the face of the instrument, it is a question of law.” Sample language on the cover letter to the title company (in this case transferring the title from individual owners to an LLC owned by them): “Please find enclosed the following documents related to this matter: 1) Copy of signed Operating Agreement for the LLC; 2) Original Grant Deed; 3) Original Preliminary Change of Ownership Report; and 4) Original tax declaration (not to be recorded). You should already have copies of the LLC1, LLC12, and the lender’s consent to the transfer, but let me know if you need me to send those documents or anything else. Please attach the correct legal description to the deed, record the grant deed, and issue a 107.9 endorsement to the title policy. You may bill the LLC for the $100 endorsement, plus the recording and handling charges, and mail it to …”Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.  An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.
• Micro-Lending and Missions
  I have been studying microbanking recently to see what role it might play in foreign and domestic missions. I went to the opening of the movie To Catch A Dollar (https://www.tocatchadollar.com/), a documentary about bringing the Grameen Bank micro-lending structure to the US. One of the panelists on the movie was the head of www.kiva.org, which is a non-profit designed to link concerned people to worthy poor people to fund loans in increments of $25. The head of Kiva is a very young tech-savy person, and Kiva has really grown fast. “Since Kiva was founded in 2005: 571,457 Kiva lenders; $205 million in loans; 98.65% Repayment rate – We work with: 131 Field Partners; 450 volunteers around the world; 59 different countries” (https://www.kiva.org/about). From a missional viewpoint, it seems that this has application in meeting a very immediate tangible needs of the people ministered to, immediate and natural connections to locals (with weekly meeting requirements between the lending organization and the borrowers according to the Grameen model), and entry into otherwise closed countries. A missionary could look into either becoming a field partner so that people they interact with could become loan recipients (https://www.kiva.org/partners/info), or assist their people to get whatever they need together to work with another field partner (https://www.kiva.org/partners). Either of these could be a low-cost entry into a field which could really benefit people and open doors for the Gospel. Please contact me if you’re interested in this.Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.  An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.
• Virtual Notary – NOT IN CA
  See the following release from the California Secretary of State before paying for an online notary.https://www.sos.ca.gov/business/notary/customer-alert.htmNotaries are pretty accessible. Until there is a clear safe harbor for this kind of notarization, don’t risk it.Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.  An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.
• Negotiation and the Bible
  I recently wrote to a client when he was negotiating with someone on a commission:”…Don’t write anything back saying “agreed” or anything of the sort. Just ask questions, like, so, is __________ also ok with the staggered payment of the lease commission if we agree to the 4% commission to her? The distillation of my 19 years as an attorney is avoid making definitive statements. Just restate the other person’s position and ask if you understand them correctly. It generally goes better for you, and a question can rarely be used as a legal “admission.” Actually, it goes way back, to the Bible:“19 My dear brothers, take note of this: Everyone should be quick to listen, slow to speak and slow to become angry, 20 for man’s anger does not bring about the righteous life that God desires.” James 1:19-20“8 Even a fool is thought wise if he keeps silent, and discerning if he holds his tongue.” Prov 17:28.“A gentle answer turns away wrath, but a harsh word stirs up anger. Prov 15:1.Ben Franklin also thought this method was the best for argumentation: “But he soon learned how to be modest in argument: to say, “It seems to me,” or “I apprehend a thing to be so.” Also, he found one could often argue even ore effectively by not making firm declarations, but by asking subtle and gentle questions. His opponents would soon make concessions from which they could fine no logical way out. Frequently, in this way, he could win an argument and yet not lose a friend.” Benjamin Franklin: Inventing America by Edwin S. Gaustad.”Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.  An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.
• New California anti-deficiency provisions effective January 1, 2011
  Effective January 1, 2011, the holder of a first trust deed secured by 1-4 family residential dwelling units may not obtain a deficiency judgment for the unpaid balance of the note after the lender accepts a “short payoff” or “short sale,” i.e. less than the full payoff in the sale of the property to a third party. While this does not specifically state that a lender may not demand a separate unsecured note as a condition for approving the short sale and does not state that the provision is not waive-able by the debtor after a default has occurred, I would fully expect that a court would not allow a lender to successfully impose such a condition. This adds to the California maze of anti-deficiency/one action rules when it comes to the rights and remedies of real property secured lenders in California. If you have any questions as to how these laws affect a particular loan, please feel free to contact me. As with all the tinkering done by the legislature in the area of foreclosures, it is an open question as to whether this will help or hurt the situation. The lender may be left with the choice of accept or reject a short payoff as payment in full even when the borrower would like to offer an unsecured note. Cal Code Civ Proc § 580e (2010)§ 580e. Deficiency under note secured by first deed of trust or first motgage; Sale for less that remaining amount of indebtedness due; Written consent of holder of first deed of trust or first mortgage as obligation; Fraud(a) No judgment shall be rendered for any deficiency under a note secured by a first deed of trust or first mortgage for a dwelling of not more than four units, in any case in which the trustor or mortgagor sells the dwelling for less than the remaining amount of the indebtedness due at the time of sale with the written consent of the holder of the first deed of trust or first mortgage. Written consent of the holder of the first deed of trust or first mortgage to that sale shall obligate that holder to accept the sale proceeds as full payment and to fully discharge the remaining amount of the indebtedness on the first deed of trust or first mortgage.(b) If the trustor or mortgagor commits either fraud with respect to the sale of, or waste with respect to, the real property that secures the first deed of trust or first mortgage, this section shall not limit the ability of the holder of the first deed of trust or first mortgage to seek damages and use existing rights and remedies against the trustor or mortgagor or any third party for fraud or waste.(c) This section shall not apply if the trustor or mortgagor is a corporation or political subdivision of the state.History: Added Stats 2010 ch 701 § 1 (SB 931), effective January 1, 2011.DEERING’S CALIFORNIA CODE ANNOTATEDCopyright © 2011 by Matthew Bender & Company, Inc.a member of the LexisNexis Group.All rights reserved.Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.
• Office Vacancy Rates in Inland Empire
  One broker (see link below) has conducted a vacancy survey on office space in Redlands, CA and concluded a 43% vacancy rate, and an economist reports a 23% vacancy rate in the entire Inland Empire.What is your experience? Is this right on, high or low? Is the conclusion that this is a good time to rent or buy correct, or is it too early to jump in? One concern I have about a tenant jumping in at this time is to make sure that there is a non-disturbance agreement signed by the lender. Otherwise, your primo lease will be eliminated if the owner loses the building to foreclosure.https://www.topix.com/city/redlands-ca/2009/09/vacancy-rate-reaches-43-percent-for-redlands-office-spaceRequired Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.
• How to read a preliminary title report
  Title insurance is a basic and necessary part of real estate purchases. It is one of the first things obtained in the due diligence process. It is not insurance itself, but it shows what the title insurance company intends to exclude from the policy of title insurance if they were to issue insurance on the property at that moment. The practical translation of a title insurance exception is that the title insurer will not defend you against any claim relating to the excepted item (often a recorded document). This can be a devastating loss. A preliminary title report usually costs somewhere in the order of $500, but this is typically not billed until the escrow closes. If the escrow closes and a title policy is purchased, the “prelim” is typically not charged. The exceptions are typically numbered, and in future posts I will give specific examples of common exceptions and how they are typically evaluated. Another topic for future posts will be the “requirements” section of the preliminary title report which is often ignored until right before close of escrow causing delays, failed deals or even law suits. I have a “user’s” knowledge of the title insurance products, and I won’t attempt to make an exhaustive presentation on this subject on which entire books have been published. Also as time goes on, I plan on giving references to resources available to the public which will remove some of the mystery of real estate law. This blog targets California real estate, although some of the comments may be applicable to other states. Please feel free to comment on or ask questions.Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.