Real Property Transactions

Governor Gavin Newsom just signed a number of housing bills into law that were passed by the Legislature this session ending on August 31, 2020.  Due to the severe scheduling constraints placed on lawmakers by the COVID-19 pandemic among other challenges, the Legislature was only able to pass a small number of bills related to housing and tenant protections, despite beginning the year with over 100 bills under consideration.  Most notably, some of the most ambitious pieces of legislation including five of the bills in the State Senate’s Housing Production Package all failed to pass before the midnight deadline on August 31, 2020.  We will continue to monitor the Legislature’s efforts to spur additional housing production in California as we head into the Fall recess and the new legislative session starting on December 7, 2020.  Below is a summary of the bills signed by the Governor on August 28, 2020.  These bills take effect on January 1, 2020, unless otherwise noted.
Continue Reading California Housing Legislation 2020

During the eleventh hour of the 2020 legislative session, the California Legislature approved 2 significant bills in response to the COVID-19 pandemic with the potential to have far-reaching ramifications for mortgage servicers.
Continue Reading Residential Eviction Protections and California Consumer Financial Protections Pass Muster During 2020 Legislative Session

California’s Proposition 13 prevents the assessed value of California real property from increasing by more than 2% per year, unless there is a change of ownership or completion of new construction.  On November 3, 2020, California voters will decide whether most commercial and industrial property should be removed from the protections of Proposition 13, with the result that such property would be subject to tax based on its fair market value.
Continue Reading Splitting The Roll – Commercial And Industrial Property Owners May Face Significant California Property Tax Increases Starting As Early As The 2022-2023 Fiscal Year

On January 23, 2020, the United States Environmental Protection Agency (“EPA”) and the U.S. Army Corps of Engineers issued the Navigable Waters Protection Rule (the “2020 Rule”), which includes a revised definition of the “waters of the United States” subject to federal regulation under the Clean Water Act.[1] The revisions in the 2020 Rule come after a line of U.S. Supreme Court (“Supreme Court”) cases ending with Rapanos v. United States,[2] as well as an Obama-era administrative rule addressing the waterbodies under federal jurisdiction (the “2015 Rule”).[3] Rapanos was the last time the Supreme Court interpreted the term “waters of the United States,” with the intent of curtailing the substantial litigation concerning the meaning of the phrase and defining what “waters of the United States” should be included under federal jurisdiction. The 2015 Rule intended to clarify the definition further and codify the Supreme Court decisions. When effective, the newly issued Navigable Waters Protection Rule will limit the 2015 Rule, attempting again to define what are and what are not “waters of the United States.”
Continue Reading Navigable Waters Protection Rule: How are the “Waters of the United States” Being Defined?

In the fourth quarter of 2019, California Governor Gavin Newsom signed into law a package of housing-related legislation that included 18 individual bills. Within this package, there were a significant number of important changes aimed at addressing the statewide housing crisis through a variety of measures, including, among others mechanisms, upzoning, approval streamlining and tenant protections.[1]
Continue Reading Tenant Protection Act (AB 1482) – COMPLIANCE GUIDE

Sinatra may have found success in the city that never sleeps, but a California court has just made it more difficult for any party doing business with a California resident to do the same. At least, when it comes to resolving disputes without a jury in a New York courtroom, or in the courtroom of any other jurisdiction that enforces pre-dispute jury trial waivers. This case will be of major interest to commercial lenders, and other businesses, who prefer to use New York as their jurisdiction of choice for governing law and adjudicating disputes.
Continue Reading Start Spreadin’ the News: California Court Says No to New York, New York; Rejects Forum Selection Clause

The California Legislature has passed AB 1482 providing for comprehensive statewide residential rent control and eviction protections and sent it to the Governor for signature, which is expected. Commencing January 1, 2020, AB 1482 prohibits a landlord of a residential property from increasing the gross rental rate more than five percent (5%) plus the percentage change in the cost of living, within a 12-month period. AB 1482 also requires a landlord to evict a tenant only for “just cause” if the tenant has occupied the property for more than 12 months. AB 1482 will be effective only until January 1, 2030.  However, AB 1482 also contains exemptions from the rent cap and just cause eviction provisions.
Continue Reading Statewide Residential Rent Control Passed In California

The Supreme Court recently issued its long-awaited ruling in Knick v. Township of Scott, concluding that a plaintiff alleging that local governments have violated the Takings Clause under the Fifth Amendment may seek relief directly in federal court, as a constitutional violation occurs at the time of the taking without payment, even if just compensation is subsequently paid.[1] In the 5-4 majority opinion, the Court overruled, in part, Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), a 34-year old precedent that established a federal claim was not ripe until a state takings plaintiff exhausted its remedies under state law. The decision, among other things, eliminates the “Catch 22” dilemma created by Williamson in which a state judgment denying the takings claim precluded the federal claim from ever becoming ripe because of the preclusive effect of the state judgment under the federal full faith and credit statute (28 U.S.C. §1738). The ramifications of the decision remain to be seen, but property owners will certainly welcome the readier access to the federal courts for takings claims.
Continue Reading Supreme Court Takes Back Takings: Knick v. Township of Scott

In connection with a commercial lease with an international company, a commercial landlord is often asked to accept U.S.-based subsidiary as the tenant entity.  The U.S. subsidiary often does not have independent financials or credit history, leading the landlord to request additional lease security.  In this context, the landlord may be offered a guaranty from a foreign-based parent company.  Although it may seem prudent to accept a guaranty from an international entity with substantial assets, these guaranties present certain challenges.  Even if the foreign guarantor has significant financial strength, a guaranty may prove worthless if the landlord cannot collect on a judgment against the guarantor.  
Continue Reading Commercial Lease Guaranties From Foreign Entities: What You Need to Know to Safeguard Your Security

Effective January 1, 2015, California law requires real estate brokers and agents to provide their clients and prospective clients with specific new disclosures, including (1) an initial disclosure form regarding the nature of agency relationships, which is typically provided at the time a listing agreement is entered into; and (2) an additional disclosure form to be presented in connection with a specific lease or purchase transaction.  Owners/landlords may elect at their option not to execute the initial disclosure form.
Continue Reading Important Alert for Commercial Owners/Landlords and Brokers/Agents: Changes to California Dual Agency Disclosure Laws Effective January 1, 2015

Many commercial property owners have approached us with questions about missing data protocols, how to properly comply with AB 1103 (and the consequences of non-compliance) and what buildings are affected.  Here is what you need to know.
Continue Reading Missing Data Protocols Under AB1103 Energy Use Disclosure Rule And Other Important Facts You Need To Know