Articles Tagged with “sacramento real estate lawyer”

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Kristina Michelle Reed has been selected to the Northern California Super Lawyers list for the 4th year in a row. Each year, no more than five percent of the lawyers in the state are selected to receive this honor.

Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. Each candidate is evaluated on 12 indicators of peer recognition and professional achievement.

Bar associations and courts across the country have recognized the legitimacy of the Super Lawyers selection process. Most recently, the New Jersey Supreme Court upheld the findings of a Special Master assigned by the court to, among other things, examine the details of the Super Lawyers’ process. In his July 2008 report, the Special Master lauded Super Lawyers’ lawyer-rating process, stating:

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Because of a correction to the facts, California’s Second Appellate District reversed its previous decision in Bowman v. California Coastal Commission, and held that a landowner can allow a permit to expire and then challenge the permit conditions on a later replacement permit. The change in facts led the Court to conclude that collateral estoppel should not apply. This ruling will have important implications for any person who seeks permits to improve his or her real property and is dissatisfied with the conditions placed upon those permits.

What Happened in Bowman v. California Coastal Commission?

Walton Emmick owned about 400 acres of land in San Luis Obispo County. A single family home and a barn stood on the property when he purchased it. Both buildings were in bad shape. The land also included a mile of shoreline that was broken up by a parcel owned by someone else. Emmick applied for a coastal development permit (CDP) to connect an already existing well to the home on the land. He also obtained over-the-counter permits for dry-rot removal and roof and deck repairs.

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Section 1954, subdivision (b) of the California Civil Code allows a landlord or property owner to enter a leased or rented dwelling to “exhibit the dwelling unit to prospective or actual purchasers.” Such entry may not be made “during other than normal business hours” unless the tenant gives consent, and the tenant must be given proper notice. While 24 hours is presumed to be reasonable notice, what are “normal business hours?” A decision by the California Court of Appeals in August of last year has answered this question.

Dromy v. Lukovsky

In Dromy v. Lukovsky, 219 Cal. App. 4th 278 (2013), landlord/property owner Dromy leased a condominium to tenant Lukovsky in 1994. In 2010, Dromy wished to sell the property and entered into a listing agreement with real estate agent Milstein. Lukovsky permitted Milstein to show the property to prospective purchasers by appointment, but she refused to allow weekend open houses. Dromy filed a declaratory action against Lukovsky in the Superior Court, alleging that Lukovsky’s refusal to allow weekend open houses was frustrating his efforts to sell the property. While the Superior Court ultimately agreed with Dromy, concluding that section 1954 “permits landlords to hold open houses on weekends with reasonable notice,” it sought to establish a schedule reasonable for both parties. The judgment provided as follows: (1) Milstein shall be permitted to hold two open houses per month; (2) open houses may be held on weekend days between 1:00 p.m. and 4:30 p.m.; (3) Dromy’s designated agent shall be present and tenant may be present during any open houses; and (4) Dromy’s designated agent shall provide ten days advance email notice to tenant of proposed open house dates, and tenant shall have 48 hours to acknowledge those dates or provide alternative dates. Lukovsky appealed this judgment and the California Court of Appeals for the Second District affirmed.

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The legal doctrine of “alternative performance” has been a valid theory of contract law for more than a century. Alternative performance, also known as “alternative contract” or “alternative-methods-of-performance contract,” is one in which the performing party may choose to perform one of two or more specified acts to satisfy the contractual obligation. An alternative contract provides more than one way for a party to complete his or her performance requirement. Alternative contract allows a party to choose the manner of performance, including the payment of a fixed sum of money instead of performance, without adhering to the required rules regarding liquidated damages clauses. Last October, in the case of McGuire v. More-Gas Investments, LLC (2013) (No. C067865, 3rd Dist. Oct. 15, 2013, 2013 Cal.App. LEXIS 819), a California appeals court held that “[A] provision in a contract that appears at first glance to be either a liquidated damages clause or an unenforceable penalty provision may instead merely be a provision that permissibly calls for alternative performance by the obligor.” Id. at 14. So, why is this decision important? It is important because it affects how existing contract provisions are likely to be interpreted going forward, and it affects how future contracts will be drafted.

To better understand the ramifications of the McGuire court’s holding, it is important to understand the term “liquidated damages.” The McGuire court defines liquidated damages “as an amount of compensation to be paid in the event of a breach of contract, the sum of which is fixed and certain by agreement, and which may not ordinarily be modified or altered when damages actually result from nonperformance of the contract.” Equating them with penalty clauses, courts have historically looked down on liquidated damages provisions in contracts and found them unenforceable; however, in the late 1970s, California changed this presumption of invalidity, replacing it with a policy of presumptive validity in commercial, non-consumer contracts. Currently, a liquidated damages clause is valid if the provision is signed or initialed by each party; set out in 10-point or 8-point bold type (depending on the ink color); and, reasonable under the circumstances that existed at the time the contract was made. If these requirements are not met, the clause will be found unenforceable.

A brief review of the facts of McGuire shows that in 2006, the plaintiff purchased two lots from the defendant. Pursuant to the purchase agreements, defendant was required to ensure that the covenants, conditions, and restrictions in place on the lots be amended so that the owners of three nearby lots not be permitted to construct or install any structure within 900 feet of the access road adjoining the plaintiff’s property. If the defendant failed to do so, it would be required to refund the plaintiff $80,000. The defendant failed to perform, and the plaintiff sued for damages, including the $80,000 refund. The trial court ruled in favor of the defendant, finding that the provision was an unenforceable penalty on the ground that neither had performed any research to determine how much the plaintiff would be harmed by the failure to obtain the amendments. As quoted above, the appeals court reversed, holding that the provision was not a liquidated damages provision but, rather, an alternative performance provision.

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For years, California has been plagued by abusive lawsuits aimed at business establishments for alleged violations of the Americans with Disabilities Act (ADA). On September 19, 2012, California Governor Jerry Brown signed into law, Senate Bill 1186, which is an attempt to curb the abusive lawsuits based on the ADA and related state laws, requiring that places of public accommodation be accessible for persons with disabilities. The law went into effect in January of 2013.

Prior to the Bill’s enactment, unscrupulous law firms devised a scheme where they would send disabled clients to as many business establishments as possible until an ADA violation was found. Once a violation was encountered, the disabled clients would repeatedly visit the guilty business establishment to encounter the same accessibility violation. Under California civil rights law, each violation triggers a minimum statutory penalty of $4,000 The law firms would then send to the guilty business establishment/property owner/lessor a “demand for money” letter or the firm would file a lawsuit on behalf of the disabled client, requesting damages for each violation (“stacked claims”). Instead of fighting an expensive legal battle, the business establishment would quickly settle. In one notorious case, an illegal immigrant and convicted felon, who also happens to be a paraplegic, filed over 500 lawsuits against businesses, and earned $165,000 in settlements, for ADA violations.

The Bill has five main provisions. The first and most important provision of the Bill is that it ends “demand for money” letters from attorneys. Attorneys may still send letters to business establishments alerting them of potential violations, but the letter may not include a demand for money. The letter must contain several items, including, identification and location of the alleged violation; an explanation of how the alleged violation interfered with the disabled person’s access; and, the date of the alleged violation/interference. The law firm must send a copy of the California State Bar and the California Commission on Disability Access.

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Sacramento real estate attorneys know that the transfer of property in California can be a complex process. Nonetheless, many people choose to prepare much of the paperwork by themselves. Below is an overview of the process and some of the common pitfalls a do-it-yourselfer might encounter without the aid of an experienced legal professional.house and money.jpg

Most people are so preoccupied with the financial aspects of buying or selling property that the actual mechanics of the transfer get overlooked. Especially in light of the mortgage crisis, those with less-than-stellar credit often are finding banks that are much less willing to lend. If they are lending, many banks are doing so at higher interest rates if they view the borrower to be a credit risk. The first pitfall to avoid in transferring title in real estate is to think that the process is over once the capital is secured.

The actual transfer of real estate is a highly technical process which can be made even more so if the real estate has unique features or the improvements upon the real estate are substantial. The official mechanism of real estate transfer in California is a “quitclaim deed”. Quitclaim deeds are, in essence, legal contracts signed in the presence of a notary in which the transferor (the “grantor”) grants the property described to the transferee (the “grantee”). The most crucial – and most overlooked – portion of this document is the description of the property and its improvements.

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office building.jpgAccording to a recent article in the Sacramento Business Journal, commercial mortgage delinquencies are up from a year ago. Trepp, LLC, a New York-based analytics and business consulting firm that tracks commercial mortgage-backed securities debt, reports that 16.6 percent of the commercial mortgage loans in the Sacramento area are currently delinquent as of February. That figure climbed from 14.2 percent a year ago. According to Trepp, more than 400 properties in the Sacramento metropolitan area have commercial mortgage-backed securities debt, and 42 of them are currently delinquent in their mortgage payments.

The report reflects the realities of the Sacramento real estate market, where many businesses are failing to make payments on their commercial mortgages. Almost every Sacramento commercial real estate lawyer is seeing an increase in distressed properties and higher rates of short sales for those properties.

What are some commercial loan delinquency solutions?

There are options for those facing these issues in our area. A business and real estate attorney in Sacramento can help alleviate some of the problems with the debt crunch. Each possible solution has its own benefits and drawbacks, and this is by no means an exhaustive list.

One option is to negotiate a modification to the existing mortgage. Businesses who are delinquent on their current payments may request that the mortgage term be extended to a greater period of years. This strategy lessens the monthly payment to a more manageable sum and might allow a business to start taking a bite out of the delinquent debt they have accumulated.

The drawback to this strategy is that the mortgage will cost the business more money in the long run, as interest will accrue over a longer period of time. You must be comfortable with paying more in the long-run to alleviate your current financial hardship. It may also be important to consider other possible effects of these modifications, including potential credit ramifications.

Another option is to maintain your current mortgage payments as best as you can and hire a Sacramento debt settlement firm to negotiate a lump sum settlement of your outstanding business mortgage debt. Your creditors may be willing to accept a lump sum payment totaling less than your current delinquent amount. A debt settlement firm would help you make that lower lump sum payment in order to discharge your total debt.

Be aware that debt settlement can have an adverse effect on your credit. After all, the creditor may decide to accept an amount lower than what you really owe. This can sometimes be a red flag to future creditors and may impact future interest rates. The reason your current creditors may be motivated to take a lump sum settlement in an amount lower than your current debt is that they would rather take the lesser amount than run the risk of your business filing for bankruptcy. A lump sum settlement, though less than the total sum, provides instant gratification to the creditor, whereas the creditor would have to wait for a business’s assets to be liquidated via bankruptcy.

Each debt situation is as unique as its eventual solution. If you are delinquent in your commercial mortgage or are a commercial landlord with delinquent tenents, you should consider consulting an Sacramento commercial real estate attorney to explore these and other possible solutions.

See Related Blog Posts:

Sacramento Commercial Landlords Leasing to MMEs Face Losing Their Property To Civil Forfeiture

Sacramento Landlord Sued: Lease Goes Up In Smoke
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