Category Archives: Real Property Transactions

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Commercial Lease Guaranties From Foreign Entities: What You Need to Know to Safeguard Your Security

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 … Continue Reading

Important Alert for Commercial Owners/Landlords and Brokers/Agents: Changes to California Dual Agency Disclosure Laws Effective January 1, 2015

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 … Continue Reading

Principal Architects on Residential Projects Liable for Construction Defects Outside Their Control; Developers and Owners May Pay the Price

Beacon Residential Community Assoc. v. Skidmore, Owings & Merrill, LLP (Cal. Supreme Court., 07/03/2014, S208173) On July 3, 2014, the California Supreme Court decided the much watched case Beacon Residential Community Assoc. v. Skidmore, Owings & Merrill, LLP.  The court held that the “principal architect” “owes a duty of care to future homeowners in the design … Continue Reading

Changes To California Title 24 Energy Use Requirements Effective July 1, 2014

What You Need to Know: On July 1, 2014, 2013 CALGreen, Part 11, Title 24, of the California Code of Regulations will go into effect. As a result, certain nonresidential additions and alterations will trigger compliance with more stringent energy-saving measures for plumbing, electrical, lighting and heating, ventilation and air conditioning systems. It is expected … Continue Reading

The Covenant of Quiet Enjoyment – A Bang or a Whimper

By Michael Gibson Almost all commercial leases in the United States include a covenant of quiet enjoyment. At its simplest level, the protection afforded by the covenant to a tenant is straightforward: a landlord must not interfere with a tenant’s use and enjoyment of the leased premises. Tenants, however, have attempted to utilize the covenant … Continue Reading

Brokers – Thou Shalt Not Accept Payments From More Than One Source In Connection With a Mortgage Loan

By Sherwin F. Root Mortgage lenders and brokers are aware that the new regulations on loan originator compensation (part of Regulation Z) will go into effect on April 1. One aspect of those regulations that has received little attention until just recently is that if the consumer pays the loan originator directly (which may be the … Continue Reading

Homeowner Associations and Members Not Necessarily Bound By Arbitration Provisions in CC&Rs or in Related Purchase Agreement Where Developer is Initial Declarant

Pinnacle Museum Tower Association v. Pinnacle Market Development (US) LLC, No. D055422 (4th Dist. July 30, 2010) By Michael Wilmar and Aaron Kleven Homeowners and homeowner associations are not necessarily bound by arbitration provisions in a declaration of covenants, conditions and restrictions, or in a related purchase agreement, where the developer is the initial and … Continue Reading

Recovery Zone Facility Bonds May Not Provide the Economic Stimulus Local Agencies Hoped For

By Claudia Gutierrez On February 17, 2009, President Obama signed into law the $787 billion stimulus bill, The American Recovery and Reinvestment Act of 2009 (ARRA). As part of ARRA, Recovery Zone Facility Bonds (RZFB) were introduced as a groundbreaking type of tax-exempt private activity bond that would tremendously increase financing opportunities for private development … Continue Reading

As of March 8, 2010, Major Title Insurers Will No Longer Underwrite Policies to Protect Creditors’ Rights

By Aaron Sobaski & Robyn Christo On February 3, 2010, the American Land Title Association ("ALTA") Board of Governors unanimously voted to withdraw and decertify its Form 21-06 Creditors’ Rights Endorsement ("Endorsement"). The California Land Title Association ("CLTA") Board of Governors quickly followed suit, withdrawing its own Endorsement (Forms 131 and 131-6) on February 16, … Continue Reading

Changes to Penalty for Failure to Timely File CA Entity Change in Ownership Statement

California recently enacted SB 816 to change the penalty provisions for failure to timely file a transfer of property ownership statement with the State Board of Equalization (the "BOE") upon a change in control or change in ownership of a corporation, partnership, limited liability company, or other legal entity. Note that these new rules apply … Continue Reading

Modifications of home loans under government program will not adversely affect REMICs

By Matthew Richardson The IRS recently issued "safe harbor" guidance that home loans modified under the Home Affordable Modification Program (HAMP) will not adversely affect real estate mortgage investment conduits (REMICs). Without this guidance, payments from the US government to lenders and servicers of home loans under HAMP may have resulted in a 100% penalty … Continue Reading

Landlords Keep Your House In Order – Claims For Past Due Rents Dismissed Where Certificate Of Occupancy Not Obtained

By Douglas E. Wance Espinoza v. Calva, ____ Cal. App.4th ____ (December 16, 2008, Case No. G040006, Fourth Appellate District, Division Three) In an unlawful detainer action, the Court of Appeal reversed the trial court’s award of past due rent under a lease where the landlord had failed to secure a required certificate of occupancy … Continue Reading

Homestead exemption does not apply to Home owned by single shareholder corporation

California Coastal Commission, etc., et al. v. Michael A. Allen, ___ Cal. App. 4th ___ (Oct. 1, 2008, Case No. B197974)   By David Collins   In this case, California Court of Appeal affirmed an order for sale of dwelling pursuant to California Code of Civil Procedure section 704.740 (part of the state’s Enforcement of … Continue Reading

Court May Not Imply Essential Terms Regarding Time and Payment to Make Option Agreement Enforceable if Parties Continued to Negotiate Those Terms After Execution of Agreement.

Patel v. Liebermensch (Aug. 21, 2007, D048582 [4th Dist, Div. 2]) __ Cal.App.4th __; http://www.courtinfo.ca.gov/cgi-bin/opinions By William M. Flieshhacker In this case, the Fourth District Court of Appeal of California addressed the issue of the enforceability of an option contract that did not include essential terms regarding the time and manner of payment.  The court held … Continue Reading

Physical Recordation Of A LIS Pendens With The Recorder’s Office Does Not Provide Constructive Notice Of The Claim Until The LIS Pendens Is Properly Indexed By The Recorder.

Kristina Dyer v. Exon Martinez et al. (February 23, 2007, G037423) __ Cal.App.4th__; http://www.courtinfo.ca.gov/opinions By Katharine E. Allen In this action for specific performance of a contract for the purchase of real property, the Court of Appeals found that the physical recordation of a lis pendens in the county recorder’s office was insufficient to provide … Continue Reading

Exculpatory Clauses In A Purchase Agreement Do Not Bar Claims By Buyers Of Real Property Alleging That The Seller’s Brokers Made Intentional Misrepresentations About The Property

Anne Manderville et al. v. PCG&S Group, Inc. et al. (January 24, 2007, D047285) __ Cal.App.4th__; http://www.courtinfo.ca.gov/opinions/ By Katharine E. Allen In this case, the Court of Appeals determined that exculpatory clauses contained in a purchase contract are against public policy to the extent such clauses exempt any individual from liability for his own fraud … Continue Reading

Appeals Court determines that a contract for the sale of two undivided parcels was void in violation of the Subdivision Map Act.

Black Hills Investments, Inc. v. Albertson’s, Inc. – January 12, 2007 By Thomas B. Snyder On November 22, 2004, Black Hills entered into a contract to purchase two parcels of real property in a retail shopping center.  At the time of the contract, the two parcels had not yet been created through subdivision of the … Continue Reading

California Supreme Court Voids Jury Trial Waivers

By Doug Van Gessel On August 4 the California Supreme Court ruled, in Grafton Partners v. Superior Court (Pricewaterhouse Coopers LLP), 2005 DJDAR 9387 that California contractual provisions in which the parties thereto pre-agree to waive the right to a trial by jury are unenforceable. The unanimous opinion stated that a right to a jury … Continue Reading

Out of Form: Special Considerations in Biotech Leasing

In order to negotiate a successful lease agreement for a biotechnology laboratory facility (“biotech lab”), landlords and tenants should evaluate the nature of their concerns, adopt a cooperative attitude, and avoid relying on traditional “form leases” better suited to leases for general office space. Biotech lab leases differ from leases for general commercial office space … Continue Reading

A Subtenant’s Guide to Subleasing

By Doug Van Gessel The sudden and dramatic reversal in the financial condition of many high-tech companies, and the ensuing softening of the local commercial real estate market, has led to a flood of sublease space on the commercial real estate market. Although this flood represents a potential economic windfall for those seeking to occupy … Continue Reading
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