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 San Jose Business & Commercial Law Blog

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SAN JOSE BUSINESS & COMMERCIAL LAW BLOG

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What Must A California Landlord Disclose to Tenants?

 By: Julia M. Wei and Josue Uribe Fonseca

What Must A California Landlord Disclose to TenantsIn a purchase and sale context, California law requires the seller of residential real estate to disclose material facts affecting the value or desirability of the property, “if it is known that such facts are not known to or within the reach of the diligent attention and observation of a buyer.” Calemine v. Samuelson, 171 Cal. App. 4th 153, 161-62 (2009). A fact is material if it has an effect on the value or desirability of the property. Alfaro v. Cmty. Hous. Improvement Sys. & Planning Ass'n, Inc., 171 Cal. App. 4th 1356, 1382 (2009).

However, as a residential landlord, the disclosure requirements to tenants are less broad and largely controlled by state law with mandated disclosures such as the Mold Addendum and the Bedbug Addendum.

There is very little law on point for landlord’s duties to disclose in a residential leasing context. This is likely due to the fact that the California Civil Code provides numerous protections for the residential tenant, such as their right to repair and deduct.

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California Landlords: Do you know the difference between a “Service Animal” and an “Emotional Support Animal”?

Depositphotos 158124112 xl 2015Recently in the news we have seen articles about people traveling with their miniature horses or their pigs. Perhaps you may be wondering why is the airline permitting the miniature horse on the plane? The answer breaks down like this: if it is a miniature horse, it is likely a service animal and if it is a pig, it is likely an emotional support animal.

Here is what the ADA says about Miniature Horses:

“In addition to the provisions about service dogs, the Department’s revised ADA regulations have a new, separate provision about miniature horses that have been individually trained to do work or perform tasks for people with disabilities. (Miniature horses generally range in height from 24 inches to 34 inches measured to the shoulders and generally weigh between 70 and 100 pounds.) Entities covered by the ADA must modify their policies to permit miniature horses where reasonable. The regulations set out four assessment factors to assist entities in determining whether miniature horses can be accommodated in their facility. The assessment factors are (1) whether the miniature horse is housebroken; (2) whether the miniature horse is under the owner’s control; (3) whether the facility can accommodate the miniature horse’s type, size, and weight; and (4) whether the miniature horse’s presence will not compromise legitimate safety requirements necessary for safe operation of the facility.”

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View Restrictions in Planned Communities Struck Down As Inapplicable to Remodeling

Depositphotos 5785967 l 2015In California, a landowner has no enforceable property rights to an unobstructed view. That means, you can’t force your downhill neighbor to trim their trees. However, I have seen the occasional CC&R’s from planned communities that restrict heights of trees, plantings, and structures to ensure that the homeowners can enjoy their view.In those circumstances, the restrictive covenants are strictly construed against the person seeking to enforce them. American jurisprudence favors alienability and free use of land so that will be the default legal view.

In the recent case of Eisen v. Tavangarian, the appellate court evaluated the CC&R language governing lots in the posh Marquez Knolls area in Pacific Palisades, California. The properties are nestled in the hills in this exclusive community overlooking Los Angeles and the Pacific Ocean. The homes are likely valued in excess of $4 million and accordingly the view of the ocean no doubt has some impact on the high property values.

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What happens if the easement does not describe the type of access granted?

What happens if the easement does not describe the type of access grantedIn the recent case of Southern California Edison Company v. Severns, the written easement described a 4 foot wide easement for the placement of five electrical power poles. The instrument went on further to provide that the grantee should have “free access” to maintain the electrical equipment. This created dispute between the grantor and the utility company because of the unspecified routes the utility company would take on the grantor’s property to access the easement. The court determined that the easement was in fact a “floating easement”.

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What Is The Broker’s Duty To Disclose Information Learned Regarding a Neighboring Property?

What Is The Brokers Duty To Disclose Information Learned Regarding a Neighboring PropertyCalifornia’s Fourth Appellate District came down with an unsurprising opinion that because a real estate broker has a duty to their principal to share information he or she possesses that will adversely affect the value of her property, an expert opinion is not required to establish breach of that duty.

The Ryans listed their La Jolla California property with Sotheby’s. During one of the open houses, the listing agent learned from the neighbor that a major remodel was planned on the neighboring property that would obstruct the Ryan’s ocean view. The Ryan’s agent failed to inform the Ryans and subsequently when the Ryan’s sold the property the listing agent failed to inform the buyers. When the buyers learned that the $3.86 million home that they had just purchased was about to lose its ocean view and be subject to two years of construction next door, they unsurprisingly sought rescission of the purchase. 

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Does a Foreclosing Trustee Have a Duty to Verify That the Lender Has Received a Valid Assignment of the Loan (deed of trust)?

San jose foreclosure lawyersContinuing the trend in California caselaw, an appellate court concluded that no, the trustee does not have duties beyond the deed of trust itself and the governing statutes.

California property developer citrus El Dorado LLC owed its lenders over $20 million in late 2014. Unsurprisingly, its lender Stearns Bank instructed the trustee, Chicago Title Company, to conduct a nonjudicial foreclosure sale of the real property secured by the deed of trust.

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Do California Property Owners Owe Third Parties An Affirmative Duty Of Care To Discover Criminal Acts Being Committed On The Property?

Do California Property Owners Owe Third Parties An Affirmative Duty Of Care To Discover Criminal ActIt is well-settled California law that land owners are required to maintain land in their possession and control in a reasonably safe condition. California courts look to what are called the “Rowland factors” to evaluate if a duty is owed beyond the principles of Civil Code section 1714:

  • the foreseeability of harm to the plaintiff
  • the degree of certainty that the plaintiff suffered injury
  • the closeness of the connection between the defendant’s conduct and injury suffered
  • the moral blame attached to the defendant’s conduct
  • the policy of preventing future harm
  • the extent of the burden to the defendant and consequences to the community of imposing a duty to exercise care with resulting liability for breach, and the availability, cost, and prevalence of insurance for the risk involved.[1]

In the recent case of Williams v. Fremont Corners Inc., The Sixth Appellate District found that the defendant shopping center had no duty to take affirmative measures beyond those already found in the record to discover criminal activity on the premises.

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What Use Constitutes Adverse Use Sufficient to Establish Prescriptive Easement in California?

What Use Constitutes Adverse Use Sufficient to Establish Prescriptive Easement in CaliforniaIn the recent case of RANCH AT THE FALLS, LLC v. Keith O’Neal et al., a ranch owner tried to establish prescriptive or equitable easement rights along private roads to reach her ranch. Ms. Hart prevailed at the trial court level but was not so fortunate on appeal. California’s second Appellate District concluded that Ms. Hart had failed to meet the hostility requirement to establish prescriptive easement.

Ms. Hart use the private roads from 2002 until 2012. However because Ms. Hart also owned several properties within the homeowners associations named in the lawsuit, she was personally entitled to use the private streets of the communities. The court cited Witkin, noting “Prescription cannot be gained if the use is permissive.”

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CALIFORNIA BORROWERS CANNOT WAIVE THE RIGHT OF REINSTATEMENT, EVEN IN A LOAN MODIFICATION.

Diemer Wei San Jose Real Estate LawyersWe are still seeing the effects of the subprime meltdown ripple through the appellate courts. In the case of Taniguchi v. Restoration Homes, what appears on first blush to be a straight forward analysis that under California law borrowers can stop a foreclosure sale by reinstating the loan had a twist.

The Taniguchis own a home in San Mateo County and in 2006, they borrowed $510k. They missed 4 loan payments in 2013, and normally to cure the default with the lender, the borrowers would simply need to reinstate the 4 missed payments and late charges under the promissory note.  Here's the twist back in 2009, the Taniguchis entered into a loan modification that adjusted the principal amount, reduced the interest rate and monthly payments, and deferred until the maturity of the approximately $116k (including accrued and unpaid interest and principal, fees, and foreclosure expenses).

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Seven Years After the Homeowner’s Bill of Rights (HBOR) – A legal update:

Homeowners Bill of Rights san jose ca residentsAfter the subprime meltdown, sweeping legislation was enacted in an effort to protect Californian homeowners. HBOR cases have since trickled in over the last seven years with a new one regarding fees for borrowers who successfully halt a foreclosure sale with a temporary restraining order.

1.  A Prevailing Borrower Is Entitled to Attorney’s Fees After Obtaining a Temporary Restraining Order.

After the Monterossa case in 2015 which held that HBOR provided for award of attorney fees and costs when a preliminary injunction issues, it was logical to then wonder if the same would apply after the borrower obtains a TRO. A TRO is an early court order, one that is obtained on a one day ex-parte notice. It is often difficult for a loan servicer or lender to mobilize in time to oppose a temporary restraining order.

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California Supreme Court Rules Foreclosure Purchasers Need To Record Their Trustee’s Deed Before Starting Eviction

California Supreme Court Rules Foreclosure Purchasers Need To Record Their Trustees Deed Before StarOwners who take title via a foreclosure sale must perfect their title before beginning eviction proceedings. This may seem obvious, but the issue was unresolved in California until just a couple of weeks ago. 

What is perfection of title? In this case, it is the recording of the Trustee’s Deed. Just being the successful bidder at sale is not enough to run down the courthouse to file an unlawful detainer.

Why is this an issue? Because of the 15 day retroactive language in Civil Code Section 2924h(c) which states the trustee’s sale “shall be deemed perfected as of 8 a.m. on the actual date of the sale if the trustee’s deed is recorded within 15 calendar days after the sale…” 

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Co-ownership of Real Estate - Who Can Lease Or Raise Rents To Co-owned Property?

Who Can Lease Or Raise Rents To Co owned Property San Jose CAIn California, real estate often has multiple owners due to investment structure or inheritance of family property.

Co-owners of California real estate can hold title to the property as joint tenants or as tenant-in-common.  These two types of ownership have different legal ramifications and tax treatment.  However, under the law, each co-owner has equal rights to the property regardless of co-ownership percentage.

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Legislative Update: California Extends Homeowner’s Bill of Rights

California Extends Homeowners Bill of RightsAfter the subprime meltdown, California enacted the Homeowner’s Bill of rights (HBOR) to amend the non-judicial foreclosure processes. Among the changes were to bar “dual-tracking” and require a 30 day pre-foreclosure communication period. Those changes sunset in 2019. SB818 reinstates certain provisions of the HBOR and Governor Jerry Brown signed the bill a few weeks ago. Most of the bills signed will go into effect Jan. 1, 2019. [https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB818]
 

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