Vol. 4, Nr. 12

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November 2009 


Special Message

The Crocker Symposium 2010, Negotiating the Real Estate Maze: Challenges and Opportunities, will bring together Southern California’s top leaders in real estate, including developers, investors, bankers, attorneys, accountants, brokers, academics, government representatives, and property owners, for an extraordinary day of networking, thought leadership, discussion, and analysis that will provide you with the essential tools required to turn obstacles into opportunities in today’s real estate maze.

The real estate industry enjoyed unprecedented growth over the past decade until the market plummeted in value in the fall of 2008. While this market downturn was initially thought to be temporary, it is now entirely unclear when the market will turn and what will precipitate that turn. Those developers, investors, and advisors who come to the Crocker Symposium will be armed with the knowledge and professional network to negotiate the industry’s convoluted maze of complex market conditions—efficiently and cost effectively. They will inevitably surpass those who choose to take on the maze unarmed.

The section's executive committee members are actively working on the educational programming for the symposium. This is the opportunity for your firm to get in at the beginning and help plan the programs by becoming a sponsor. Contact Brant Dveirin at bdveirin@bbklaw.com for more information.

So, mark your calendars for March 23, 2010, and plan to attend the Benjamin S. Crocker Symposium on Real Estate Law and Business 2010, at the Los Angeles Convention Center.



Please note these important Real Property events coming soon in 2010.

Calling All Recruits—The State Bar Real Property Law Section’s Third Annual Real Property Lawyer Boot Camp.
The Real Property Lawyer Boot Camp has been scheduled for February 26 to 28, 2010, at the lovely Seascape Beach Resort on Monterey Bay, in Aptos, California, just 10 miles south of Santa Cruz (www.seascaperesort.com). Boot Camp is an intensive 48+ hour training on the real estate transactional practice, arranged by the State Bar Real Property Law Section. It includes a primer on the business and the terminology used in the real estate profession. This boot camp considers important topics for lawyers: buying, financing, developing, leasing, and selling real estate, negotiating deals and drafting agreements.

The boot camp also covers career and business development, as well as dealing with the real estate downturn. Boot Camp gives less experienced real estate practitioners the inside track to building the knowledge and skills base for successful careers. This is the ideal venue for business lawyers, environmental lawyers, litigators and solo practitioners, who want to quickly develop a real estate “tool kit” covering the real estate industry and real estate law. You will find this an efficient and useful program.

CEB (the Platinum Program Sponsor) will provide each participant with free access to its online OnLAW Real Property Law Library for an entire year—a tremendous benefit that would ordinarily cost almost as much as the entire Boot Camp registration fee. Program details and registration information will be available soon on the Real Property Law Section’s page on the State Bar Web site.



The State Bar Real Property Law Section’s Annual Retreat 2010-“The Road to Recovery.”
This 29th Annual Real Property Retreat is scheduled for April 30 to May 2, 2010, at the Silverado Resort and Country Club in Napa Valley.

In 2008, Silverado completed a five-year, $15 million dollar property wide upgrade including the golf courses, the spa, a new restaurant, accommodations, meeting rooms, and all public spaces. You won’t want to miss this event. Check out what’s new at the resort.
For more information about the Retreat, contact Theresa Raglen at Theresa.Raglen@calbar.ca.gov or 415-538-2393. Details will also become available in due course on the State Bar Web site.



Important New Laws

New Legislation:
Senate Bill No. 816 has been signed into law as Chapter 622 amending Revenue & Taxation Code Section 408 et seq. imposing a mandatory penalty for failing to timely file a Change of Ownership Statement with the State Board of Equalization when a change of ownership as defined in the statutes implementing Proposition 13 occurs without the filing of a PCOR attached to a recordable document.

New Regulations:
Financial regulators consisting of the FDIC, OTS, NCUA, OCC and others promulgated on October 30 a thirty-three page document, Policy Statement on Prudent Commercial Real Estate Loan Workouts, as supervisory guidance to assist banking examiners to determine that workouts of non-performing loans are not merely part of a “pray and delay” or “amend and extend” strategy to hide the poor condition of loans on the books of a financial institution.


Sincerely,

Norm Chernin, co-editor, Real Property Newsletter
E-mail address: nchernin@firstam.com

Real Property Scheduled Events 
View All Real Property Events


November 17, 2009:  Thorny Real Property Issues in Probate Litigation.
The program will address real property issues that arise in probate including, but not limited to, Probate Section 852 petitions and how to litigate them, unique procedural issues in probate and settlements involving real property, among other topics.

 

Recent Cases
Cases from October 1 through October 31

Adverse Possession
Bankruptcy
Construction Law
Deeds of Trust
Eminent Domain
Encroachments

Homesteads
Land Use
Land Use
Landlord and Tenant
Real Property Taxation
Trust Deed Foreclosure
 

Adverse Possession
Where adverse possessor fenced, irrigated, improved, and paid taxes on property, such possession was sufficiently open and notorious to create a presumption of notice to the world--including actual property owner even if owner was out of the country for the entire five-year period.
      Nielsen v. Gibson - filed October 13, 2009, Third District
      Cite as 2009 SOS 5974
      Full text                                                                                                                                Back to Top

Bankruptcy
Under 11 U.S.C. Sec. 522(p), limiting to $125,000 a debtor’s homestead exemption in "any amount of interest that was acquired" within 1215 days of filing a bankruptcy petition, statute meant acquisition of ownership and did not apply to a homestead declaration recorded within the 1215-day period as to land the debtor had owned for the previous 10 years. Where trustee sold debtor’s property for far more than the amount debtor listed in his chapter 13 and subsequent chapter 7 petitions, the bankruptcy estate was entitled to retain all the appreciation in the value of the property in excess of the amount the debtor listed absent any proper amendment by the debtor.
     In re Greene - filed October 2, 2009
    Cite as 07-16067
    Full text                                                                                                                               Back to Top

Construction Law
Where contractor's license was issued to corporation, but its qualifying "responsible managing officer/responsible managing employee" ceased to be actively involved in the business and turned it over to an unlicensed person, and no replacement was ever qualified in the RMO/RME's place, the corporation and the person who took it over were both liable to property owner for reimbursement or disgorgement of all moneys paid, pursuant to Contractor's State License Law. Unlicensed contractor may not deduct cost of materials or services rendered from obligation for reimbursement or disgorgement.
     White v. Cridlebaugh - filed October 20, 2009, Fifth District
     Cite as 2009 SOS 6057
     Full text                                                                                                                               Back to Top

Deeds of Trust
Term "record" as used in Civil Code Sec. 882.020 means a recorded document reflecting an actual debt obligation, such as a deed of trust or a promissory note, and not a notice of default. Where loan’s maturity date was not ascertainable from the record, defendants’ rights to enforce terms of a deed of trust had not expired and will not expire until 60 years following recording of a deed of trust.
     Schmidli v. Pearce - filed October 13, 2009, Third District
     Cite as 2009 SOS 5978
     Full text                                                                                                                               Back to Top

Eminent Domain
Where gas station franchisee’s property was condemned in an eminent domain proceeding, causing franchisee to lose franchise, franchisee’s claim for lost goodwill pursuant to Code of Civil Procedure Sec. 1263.510 was not preempted by the Petroleum Marketing Practices Act. Substantial evidence supported trial court’s award of litigation expenses to franchisee where government’s final offer was less than one-fourth of the value placed on franchisee’s goodwill by government’s own appraiser, and government could not have expected its preemption argument to prevail, as the more recent rulings by trial court were in favor of franchisee’s goodwill claim.
    People ex rel. Department of Transportation v. Acosta - filed October 26, 2009, Third District
    Cite as 2009 SOS 6126
    Full text                                                                                                                              Back to Top

Encroachments
Judicial review of arbitrator's decision was proper where arbitrator excluded evidence of a lot-line adjustment in a dispute between buyer and seller over alleged diminution in property value due to an encroachment onto adjacent property, since arbitrator's actions prejudiced seller and undermined "fundamental principle" of Code of Civil Procedure Sec. 1286.2 that an arbitrator must consider material evidence; parties to an arbitration have bargained for a final and binding decision and party who was deprived of an opportunity to present material evidence did not receive the benefit of that bargain.
    Burlage v. Superior Court (Spencer) - filed October 20, 2009, Second District, Div. Six
    Cite as 2009 SOS 6053
    Full text                                                                                                                               Back to Top

Homesteads
Under 11 U.S.C. Sec. 522(p), limiting to $125,000 a debtor’s homestead exemption in "any amount of interest that was acquired" within 1215 days of filing a bankruptcy petition, statute meant acquisition of ownership and did not apply to a homestead declaration recorded within the 1215-day period as to land the debtor had owned for the previous 10 years. Where trustee sold debtor’s property for far more than the amount debtor listed in his chapter 13 and subsequent chapter 7 petitions, the bankruptcy estate was entitled to retain all the appreciation in the value of the property in excess of the amount the debtor listed absent any proper amendment by the debtor.
    In re Greene - filed October 2, 2009
    Cite as 07-16067

    Full text  
                                                                                                                            Back to Top
Land Use
"Indirect source review" fees imposed by pollution control district--which developers may be required to pay in lieu of reducing emissions by incorporating pollution-reducing features in their projects--are not development fees and are thus not subject to the Mitigation Fee Act. ISR fees were reasonably related to the burden posed by a new development where calculated based on a dollar-per-ton estimate of the cost for district to reduce the emissions off-site that the developer did not mitigate on-site. Imposition of ISR fees was within district's authority under the California Clean Air Act.
    California Building Industry Association v. San Joaquin Valley Air Pollution Control District - filed October 6, 2009, Fifth District
    Cite as F055448
    Full text                                                                                                                              Back to Top

Land Use
Where a developer submitted a development application to a county and county hired a consultant to prepare an environmental report, consultant could not be held liable to developer for damages due to consultant’s failure to prepare EIR in a timely fashion.
    Lake Almanor Associates L.P. v. Huffman-Broadway Group, Inc. - filed October 30, 2009, First District, Div. Five
    Cite as A122563
    Full text                                                                                                                              Back to Top

Landlord and Tenant
Department of Housing and Urban Development regulation permitting eviction of an assisted tenant during lease term for "good cause," including a desire to lease at a higher rent, does not preempt municipal ordinance prohibiting eviction of tenants whose rent is stabilized by federal government in order to raise rents. Because tenants' lease contracts incorporated and defined the parties' rights and obligations and the applicability of relevant federal and state law, tenants' action for declaratory judgment regarding their right to remain in their apartments was properly considered an action "on a contract" for purposes of an award of attorney fees.
    Barrientos v. 1801-1825 Morton LLC - filed October 9, 2009
    Cite as 07-56697
    Full text                                                                                                                               Back to Top

Real Property Taxation
When an applicant for Proposition 60 tax relief builds a new residence on land purchased years earlier, the value of that replacement dwelling must be determined when construction is complete.
    Wunderlich v. County of Santa Cruz - filed October 23, 2009, Sixth District
    Cite as 2009 SOS 6107
    Full text   
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Trust Deed Foreclosure
Where three liens were created by successive deeds of trust and last lien claimant in time obtained a subordination agreement from one, but not both, of the previously senior lien holders so that third lien became senior to the first lien in time but remained junior to second lien and first lien in time was junior to third lien but senior to second lien, funds left over after foreclosure sale and one lien holder was paid were properly allocated between two remaining lien holders; lien holders' failure to make clear the relative priority of all three liens did not entitle former property owner to funds left over from foreclosure sale. Trial court did not err in relying on judicial foreclosure cases in non-judicial foreclosure proceedings as there is no particular difference between disposition of surplus funds after a judicial or non-judicial foreclosure sale.
    Wells Fargo v. Neilsen - filed October 22, 2009, First District, Div. Two
    Cite as A122626
    Full text                                                                                                                                Back to Top

Reader Reactions
So - What do you think of the Real Property News?  Please send us your comments and suggestions. This is your newsletter.


 

Los Angeles County Bar Association
2009 Real Property Section Newsletter
REAL PROPERTY SECTION REVIEW
Daniel L. Goodkin, Editor    *   Norman A. Chernin, Co-Editor

SECTION OFFICERS
Chair
Michael S. Klein

First Vice-Chair
Pamela L. Westhoff

Second Vice-Chair
Gregg J. Loubier

Treasurer
Theresa C. Tate

Secretary
Sarah V. J. Spyksma

Immediate Past-Chair
Donald C. Nanney


Section Administrator
Terrina Scott

EXECUTIVE COMMITTEE MEMBERS

Eric Altoon
Nedra E. Austin
Babak B. Baradaran
Susan J. Booth
James L. Brat
Norman A. Chernin
Brant Dveirin
Robert T. Flick
Daniel L. Goodkin
Brian Richard Hochleutner
Linda S. Koffman
Rebecca H. Lessley

Peter J. Niemiec
Robert C. Pearman
Leslie D. Reed
D. Eric Remensperger
David C. Sampson
Michael G. Smooke
Linda E. Spiegel
Andrew J. Yamamoto


SUB-SECTION CHAIRS
Commercial Development & Leasing, Marcia Z. Gordon
Construction Law, Richard Mah
Land Use Planning & Environmental Law, Claire Hervey Collins
Real Estate Finance, Caroline Dreyfus
General Real Estate Law, Nadav Ravid
Title Insurance, Gytis L. Nefas

 

Readers are advised that changes in the law may affect the accuracy of this publication or the functionality of links after the publication date.