- In This Issue -

Special Announcement

As promised, here is this year's new and improved version of the annual review of new laws affecting real estate prepared by Ryan Squire and Tina Esrailian of the firm of Garrett & Tully which you can access by clicking HERE. We greatly appreciate their efforts.

Recent Cases
From February 1 through February 28

Community Property
Construction Law
Landlord and Tenant
Landlord and Tenant
Landlord and Tenant
Mortgage Brokers

Non-Judicial Foreclosure
Powers of Attorney
Rent Control
Section 8 Housing Assistance

Community Property
Form-of-title presumption does not apply in cases in which it conflicts with the presumption that one spouse has exerted undue influence over the other. Undue-influence presumption applied where wife testified that she freely and voluntarily executed a quitclaim deed in favor of husband to obtain a more favorable interest rate on a loan to refinance based on his promise to restore her name to the title once the refinance was complete. Trial court lacks discretion to deny attorney fees if aggrieved spouse shows a breach of fiduciary duty as to the management and control of community property that does not rise to the level of fraud, malice, or oppression.
     In re Marriage of Fossum - filed January 28, 2011, Second
     District, Div. One
     Cite as 2011 S.O.S. 678
     Full text

Construction Law
If a home builder elects or attempts to use its alternative contractual procedures to address alleged construction defects, it may not thereafter require homeowners to comply with statutory pre-litigation procedures, even if its attempt at enforcement of its own procedures fails because the alternative procedures are found to be unenforceable.
     Anders v. Superior Court (Meritage Homes of California, Inc.) -      filed February 7, 2011, Fifth District
     Cite as 2011 S.O.S. 795
     Full text

Landlord and Tenant
Where parties issued a counter proposal, a revised proposal, and a final proposal, district court did not err in finding, as a matter of law, that the final proposal was not meant to be binding.

District court did not err in allowing extrinsic evidence to be introduced to determine whether lease duration was absent or whether it could be implied from 10-year put and call options. District court also did not err in letting jury resolve this conflict. Substantial evidence supported jury's findings with respect to the binding nature of the final proposal and the duration of the lease.

District court did not err in awarding plaintiff the full benefit of its bargain in the form of damages for both lost rent and the value of its lost put option.
     First National Mortgage Company v. Federal Realty Investment
- filed February 1, 2011
     Cite as 09-16377
     Full text

Landlord and Tenant
Lessor who accepted and retained benefit from early termination payment waived ability to argue lessee forfeited the right to the early termination the payments were intended to provide. An anti-waiver provision in a lease can be waived.
     Gould v. Corinthian Colleges, Inc. - filed February 22, 2011,
     Second District, Div. Six
      Cite as 2011 S.O.S. 999
     Full text

Landlord and Tenant
A lessor may not recover cost of repair damages for breach of a lease's maintenance and repair obligations when the lease has neither expired nor been terminated. Such a lessor is limited to damages from waste caused by injury to its reversion interest. Where a lease has not expired or been terminated, damages from waste must be sufficiently substantial and permanent to cause injury to a reversion interest that will not become a possessory interest until the end of the lease term.
     Avalon Pacific – Santa Ana, L.P. v. HD Supply Repair &
     Remodel, LLC
- filed February 22, 2011, Fourth District, Div.
     Cite as G043049
     Full text

Mortgage Brokers
Mortgage lender who acted as a mortgage broker owed a fiduciary duty to borrower. Term of the mortgage was sufficient foundation for calculation of damages, but an award of damages based on an interest differential over the term of the loan was inconsistent with award of damages for a prepayment penalty. Oral brokerage agreement and loan documents that were all part of the same transaction were properly treated as a single agreement.
     Smith v. Home Loan Funding, Inc. - filed February 24, 2011,
     Second District, Div. Six
     Cite as 2011 S.O.S. 1132
     Full text

Non-Judicial Foreclosure
California's comprehensive non-judicial foreclosure scheme does not permit a homeowner to sue for a presale determination that the party initiating foreclosure did not have authorization to do so. By executing deed of trust, homeowner authorized lender's nominee to initiate non-judicial foreclosure proceeding in nominee's own name.
     Gomes v. Countrywide Home Loans, Inc - filed February 18,
     2011, Fourth District, Div. One
     Cite as 2011 S.O.S. 995
     Full text

Powers of Attorney
A special power of attorney coupled with an interest in property is terminated upon extinguishment of the interest.
     Bonfigli v. Strachan - filed February 23, 2011, First District, Div.
     Cite as 2011 S.O.S. 1109
     Full text

Rent Control
To extent that city's housing ordinance prohibits "bad faith" interruption, termination, or failure to "provide housing services," and failure to perform maintenance and repairs, the ordinance is not, on its face, violative of state Constitution's judicial powers clause; since violations would normally produce a quantifiable, pecuniary loss, ordinance's provision for a "restitutive" remedy in the form of a rent reduction falls within city's quasi-judicial powers. To extent that ordinance defines various acts of harassment or discrimination as a "decrease in [housing] services" for which a rent board can order a reduction in rent, such reduction is not restitutive and the ordinance, on its face, violates the judicial powers clause. Provision authorizing action for damages and/or criminal prosecution against landlord or agent causing tenant to "vacate a rental housing unit through fraud, intimidation or coercion" is not unconstitutionally vague and does not, on its face, target constitutionally protected speech. Provision barring landlord or agent from causing tenant to "vacate with offer(s) of payments to vacate which are accompanied with threats or intimidation" is a reasonable restriction on the time, place, or manner of speech. Provision barring landlord from "continuing to offer payments to vacate" after tenant has notified the landlord in writing that they no longer wish to receive further offers of payments to vacate is an unconstitutional regulation of commercial speech. City lacks authority to effectively add, by local ordinance, an attorney fees provision to the state unlawful detainer statutes.
     Larson v. City and County of San Francisco - filed February 23,
     2011, First District, Div. One
     Cite as 2011 S.O.S. 1115
     Full text

Mortgages on rental properties were "business purpose loans" to which the Real Estate Settlement Procedures Act does not apply.
     Johnson v. Wells Fargo Home Mortgage, Inc. - filed February 15,
     Cite as 09-15937
     Full text

Section 8 Housing Assistance
Federal housing assistance statutes allowing property owners to raise their rents to a reasonable market rate does not allow such owners to refuse to accept payment by an enhanced payment voucher and then evict tenants receiving housing assistance and paying only their statutorily determined portion of rent each month for nonpayment of rent; tenants in expiring project-based units have a statutory right to remain in their homes, absent just cause for eviction, and cannot be required to pay more than their statutorily determined portion of rent each month. District court did not abuse its discretion by entering an injunction preventing defendants from evicting plaintiffs for paying their pre-lawsuit Section 8 contribution, or from charging plaintiffs an increased rent without accepting enhanced vouchers, but it erred in requiring defendants to execute contracts with housing authority if defendant were to opt out of Section 8.
     Park Village Apartment Tenants Association v. Mortimer Howard
- filed February 25, 2011
     Cite as 10-15303
     Full text

District court erred in ruling that city did not impose a substantial burden on church's exercise of religion within the meaning of the Religious Land Use and Institutionalized Persons Act through its facially neutral and generally applicable zoning regulations as a matter of law. A triable issue was raised as to whether city's zoning regulations imposed a substantial burden on religious exercise where church presented evidence that none of the parcels zoned for assembly use within city were suitable for the needs of a large religious congregation. Assuming city had a compelling interest in preserving certain land for industrial use, a triable issue was raised as to whether city used the least restrictive means to achieve its interest.
     International Church of the Foursquare Gospel v. City of San
     Leandro (Faith Fellowship Foursquare Church)
- filed February
     15, 2011
     Cite as 09-15163
     Full text


Los Angeles County Bar Association
2011 Real Property Section Newsletter
Daniel L. Goodkin, Editor, Real Property Section Review
Norman A. Chernin, Editor, Real Property Section Newsletter

Pamela L. Westhoff

First Vice Chair
Gregg J. Loubier

Second Vice Chair
Theresa C. Tate

Treasurer/Crocker Chair
Sarah V. J. Spyksma

Norman A. Chernin

Immediate Past Chair
Michael S. Klein

Section Administrator
Terrina Scott


Eric Altoon
Nedra E. Austin
Susan J. Booth
Claire Hervey Collins
Caroline Dreyfus
Brant Dveirin
Robert T. Flick
Daniel L. Goodkin
Marcia Z. Gordon
Ryan Iwasaka

Linda S. Koffman
Trudi J. Lesser
Peter J. Niemiec
Robert C. Pearman
Leslie D. Reed
D. Eric Remensperger
Michael G. Smooke
Linda E. Spiegel
Andrew J. Yamamoto

Commercial Development and Leasing, Nadav Ravid
Construction Law, Richard Mah
Land Use Planning and Environmental Law, Laurence L. Hummer
Real Estate Finance, Owen P. Gross
General Real Estate Law, Brian R. Hochleutner
Title Insurance, Vanessa A. Widener