Nuisance Law Series


Camille Rogers

by Camille Rogers on April 14, 2014

in Legal Update, Neighbor Issues, Real Estate Law

If you find yourself dealing with a neighborhood nuisance issue, it is very important to familiarize yourself with remedies that can help mitigate these matters. Check out our Nuisance Law Series! We hope you find these blog articles helpful. As always, if you have any questions about a potential real estate legal matter, please contact the Law Offices of Peter N. Brewer at (650) 327-2900 or to learn more about our firm, please visit us on the web at www.BrewerFirm.com.

 

By: Simon Offord, Esq. (Click image for bio)

There Goes the Neighborhood…An Overview of Nuisance Law

What can you do if someone moves in to your Palo Alto neighborhood and suddenly the neighborhood you were used to has completely changed?  In certain instances, the newcomer’s presence may constitute a nuisance, and you may be able to…

There Goes the Neighborhood (Part 2)… Damages Available Resulting from Nuisance

In my previous article titled “There Goes the Neighborhood,” I provided an overview of some of the activities that can constitute a nuisance.  In this article, I will discuss the types of remedies that are available if you are able to prove the existence of a nuisance.

The owner of property that is adversely affected by a nuisance has remedies to enjoin its continuance and/or recover damages for past injury.  In order to obtain these remedies, the injured party can either…

Do Trees Qualify as a Fence Under the California Spite Fence Statute?

The California Legislature has carved out specific rules to deal with an issue that commonly causes disputes among neighbors: spite fences.   A “spite fence” is the generic term for any structure that harms a homeowner when that harm is the purpose behind …

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Most condominium or townhouse owners are familiar with the responsibility of paying their homeowner association’s (“HOA”) dues.  However, many owners do not realize that if they fail to do so, the HOA has the power to place a lien on the unit for the delinquency and foreclose on the property to satisfy the lien.

A Homeowners’ Association and its member-owners are normally governed by a handful of documents:

  • Articles of Incorporation and Bylaws;
  • Covenants, Conditions and Restrictions (“CC&Rs”)

The Davis-Stirling Common Interest Development Act (the “Act”) is the law that codifies the other obligations of the HOA and its members.  Civil Code Section 1367.1 explains how an HOA may secure delinquent assessments and related fees by way of lien against the homeowner’s unit.

Recently, in the case of Huntington Continental Town House Association, Inc., v. The JM Trust, the California Court of Appeals held that an HOA must accept and apply partial payments to the homeowner’s delinquency.  The homeowner in the case had tried to submit payment to the HOA, not once, not twice but three times.  The homeowner never got the amount quite right, or otherwise failed to abide by the payment plan they originally asked for.  Regardless, they did make efforts to pay to avoid foreclosure.  The HOA’s law firm rejected the partial payments each time and filed suit in court for foreclosure on the HOA’s lien.

The trial court ruled in the HOA’s favor, but the appellate court concluded that nothing in the Davis-Stirling Act allowed the HOA to reject partial payments from the homeowner.  Instead, the court noted “allowing partial payments to pay down delinquent assessments after lien recordation would be consistent with the legislature’s desire to limit the remedy of foreclosure…” [Huntington Continental Town House Association, Inc., v. The JM Trust, Jan. 13, 2014]

Author’s Comment – Foreclosure is a drastic remedy and HOA lien amounts tend to be very small.  Here, the disputed amount was about $3,500.  Accordingly, it is understandable that the court would conclude that where the Act could be construed in the homeowner’s favor, it should be.

If you are seeking real estate legal counsel regarding a California based property, don’t hesitate to contact our law firm at (650) 327-2900 or to learn more about our firm and read attorney bios, visit us on the web at www.BrewerFirm.com.

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Seyed Hosseini was a medical school graduate who incurred substantial student loans.  After graduating he was unable to pass the medical licensing boards and never became a doctor.  Eventually, after being unable to pass the licensing exam, he filed for bankruptcy relief to discharge over $280,000 in student loan debt.  Typically, student loans are not dischargeable unless certain factors are met.

Hosseini filed an adversary proceeding, essentially a trial in the bankruptcy court, to discharge his student loans.  The bankruptcy court agreed with Hosseini’s position and ordered the student loans to be discharged.  After the trial, Hosseini sought to recover approximately $110,000 in attorney’s fees on the theory that the student loan promissory note provided for attorney’s fees incurred in enforcing the terms of the student loan.  However, the bankruptcy court denied the request for attorney’s fees on the basis that an action to discharge debt does not contest the terms of the loan nor the amount due under the loan.

THE DECISION: The United States Bankruptcy Appellate Panel of the Ninth Circuit affirmed the bankruptcy court’s decision and held that a debtor seeking a discharge of a loan is not analogous to an attempt to enforce the terms of a loan.  The Court noted that generally parties cannot recover attorney’s fees for their suit unless there is a specific contractual or statutory provision permitting the recovery of attorney’s fees.  However, in most loans, and as was the case here, the lender includes a provision providing for attorney’s fees if the lender is required to enforce the terms of the loan.  Under California law, the general rule is that if one side is entitled to attorney’s fees by the terms of the contract, the other side is also entitled to attorney’s fees.  In this case, the Court held that because the debtor was solely attempting to discharge the debt, the action did not constitute a dispute over the terms or amount of the debt.

WHY THIS DECISION IS IMPORTANT: This holding greatly limits the attorney’s fee provision in bankruptcy and may prevent lenders from recovering attorney’s fees in future actions.  If a defense to a suit to discharge any obligations to pay a loan is not considered relevant to enforcing the loan terms, it is unclear what would be required to trigger the attorney’s fee provision.  It is likely that the attorney fees provision could be drafted more broadly so as to apply to this situation, should the lender deem it appropriate to do so.

COMMENT:  In this case, a poorly drafted attorney’s fee provision saved the lender more than a hundred thousand dollars.  However, many times, the situations will be reversed.  To insure that a lender will be able to collect its attorney’s fees, a better attorney’s fee provision should be included to specifically address in what situations outside of collection of the loan can fees be recovered.

As always, give us a call at (650) 327-2900 if you think you have a real estate matter and need legal representation or visit us on the web at www.BrewerFirm.com.

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As the economy has improved we have seen a steady increase in fence and boundary disputes.  This is an increasingly common issue because when owners remodel their homes, a survey is sometimes required.  The survey reveals that the fence is not on the property line, despite everyone’s prior assumptions.  The question then becomes, does the misplaced fence give the encroaching neighbor some ownership interest in the land they have enclosed?

The short answer: No.

The common theories used by the encroachers to claim ownership or rights to the encroached area are adverse possession, prescriptive easement, or equitable easement.  However, the discussion below will explain the significant hurdles the encroacher faces in perfecting such claims, and why gaining any interest in the land is unlikely.

Adverse Possession

Adverse possession is the strongest remedy available to the encroacher.  If one prevails on an adverse possession theory, they become the fee owners of the encroached land.  For this reason, adverse possession is very difficult to establish.

To establish title by adverse possession, the user must prove satisfaction of all of the following five requirements:

  1. Possession must be held under either a claim of right or color of title.
  2. There must be actual, open, and notorious occupation of the premises in such a manner that constitutes reasonable notice to the record owner.
  3. Occupation must be both exclusive and hostile to the title of the true owner.
  4. There must be uninterrupted and continuous possession for at least five years.
  5. The possessor must pay all of the taxes levied and assessed on the property during the five-year period.

Buic v. Buic (1992) 5 Cal.App.4th 1600, 1604.

The person who holds the legal title is presumed to be the owner of the property.  The person who claims title by adverse possession has the burden of overcoming the presumption in favor of the owner by proving each of the statutory elements of adverse possession in order to establish a new title.  C.C.P. § 321, California Maryland Funding, Inc. v. Lowe (1995) 37 Cal.App.4th 1798, 1803.

The first four elements are usually provable in a misplaced fence case.  The most difficult element to establish is the payment of taxes.

As a general rule, where adjoining lots are assessed merely by numbers and without reference to a survey, the claimant cannot establish adverse possession because he cannot establish payment of taxes.  Wilder v. Nicolaus (1920) 50 Cal.App. 776, 785.  Our experience has shown us that many of the local county assessors follow this general rule.  Thus proving the payment of taxes will require the encroacher to have taken explicit steps to ensure they have paid the taxes.  This is very rarely the case, as in most situations the encroacher does not even realize the fence is misplaced.

Prescriptive Easement

When they cannot establish adverse possession, encroachers often fall back on a claim for prescriptive easement.  The elements for prescriptive easements are the same as adverse possession, excepting the requirement to pay taxes.  However, the law does not allow for an exclusive prescriptive easement, as such a remedy essentially provides the encroacher fee title to land.  An easement is, by definition, a shared use.  Exclusive occupation is a right of ownership.  In order to establish ownership one must have paid the taxes.  Thus, there is no such thing as an exclusive easement, nor a prescriptive easement acquired by exclusive occupation.

Put simply, the courts have made clear that adverse possession may not “masquerade as a prescriptive easement.”  Since the fence typically completely excludes the landowner from using or occupying his or her land, the prescriptive easement theory fails.

Equitable Easement

The third common tactic used by encroachers is to seek an equitable easement.  The court may exercise its equitable jurisdiction to issue a permanent injunction against interference with future use when:

  1. a party has used and improved an easement for a long period of time with an innocent belief that they have the right to use the land,
  2. there would be irreparable harm if they could not continue to use the easement, and
  3. the affected property owner would suffer little harm from the continued use.

These last two elements are often taken together as “a balancing of the hardships.”  In most equitable easement cases, past Courts have only allowed the encroacher some continued use of the encroached area if the encroacher has significantly improved the land or spent significant sums on the land.  In most misplaced fence cases it is rare for there to be significant improvements in the area in question because (a) it is usually a relatively small area, and (b) people rarely place substantial improvements immediately adjacent to their fence line.

As you can see, acquiring rights in land enclosed by a misplaced fence is an uphill battle.  However, every case is different and whether you have certain rights is very fact specific.  Further, if you have lost land that you thought you were entitled to because of a misplaced fence, there may be other remedies available to you.  The Law Offices of Peter N. Brewer resolve and/or litigate these disputes on a very regular basis, and are here to help.  If you have any questions about this issue, or any real estate legal issues, please contact us at (650) 327-2900, or on the web at www.BrewerFirm.com.

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Real Estate Case Update Blog Series


Camille Rogers

by Camille Rogers on March 17, 2014

in Legal Update, Real Estate Law

The attorneys at the Law Offices of Peter N. Brewer encourage you to stay ahead of the curve by reading our “Real Estate Case Update” blog series. We hope that the information you find here will be relevant for you as it covers a wide spectrum of common real estate related problems. Our knowledgeable attorneys also have extensive experience in litigation, representing their clients in various real estate matters in California. If you have a real estate legal matter and are seeking legal representation, don’t hesitate to contact our office at (650) 327- 2900 x 10 or on the web at www.BrewerFirm.com.

 

By: Simon Offord, Esq. (Click image for bio)

Court Limits Poorly Drafted Easement to Historical Use

The recent case of Rye v. Tahoe Truckee Sierra Disposal Co., Inc. affirms the long-standing principle in easement law that an express easement over a general area does not automatically provide the easement owner exclusive use of…

 

By: Henry Chuang, Esq. (Click image for bio)

A Bona Fide Lease Survives a Foreclosure Sale

The First Appellate Court overturned the Santa Clara Superior Court and held that a bona fide lease survives a foreclosure.  In Nativi v. Deutsche Bank, the Court found that the federal statute, Protecting Tenants Against Foreclosure Act of 2009 (“PTFA”), trumped state law and protected a lease from being wiped out in a foreclosure sale.  As the name suggests, PTFA is a law that was designed to…

Court Requires Lender to Offer a Permanent Loan Modification on Completion of Trial Period

Following in the footsteps of several recent cases, the Third Appellate District of California held that JP Morgan Chase was required to grant a permanent loan modification.  In Bushell v. JPMorgan Chase Bank, the Appellate Court found that because the borrower had successfully completed the trial modification and provided all of the required documentation, Chase was required to…

 Anti-Deficiency Statutes Prevent Claims of Fraud for Purchase Money Loans

In November 2013, in Heritage Pacific Financial, LLC v. Montano, the Bankruptcy Appellate Panel for the Ninth Circuit (“BAP”) held that the one-action rule prevents a lender from seeking a deficiency judgment, even for fraud, for a purchase money loan of…

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There have been a string of recent cases that have been decided in favor of borrowers against their lenders who have failed to offer loan modifications.  The most recent case is Lueras v. BAC Home Loans Servicing, LP.  In Lueras, the Court found that a lender could be held liable for misstating the status of a foreclosure or loan modification.  Further, a lender who is participating in Fannie Mae’s HomeSaver Forbearance Program is required to explore in good faith permanent alternatives to foreclosure.

Richard Lueras was a borrower who became delinquent on his home loan.  When he and his wife fell on hard times, he sought a loan modification.  Bank of America, who was the successor to BAC Home Loans, offered Lueras six months’ of reduced payments under Fannie Mae’s Homesaver Forbearance Program.  Although the program was supposed to be for six months, Lueras actually made payments at the reduced rate for ten months, while exploring a loan modification.  During this time Lueras received conflicting information from BofA about whether he was approved for a loan modification.  Further, he received notices that he was in foreclosure and written notices from BofA that no foreclosure would occur.  Eventually, BofA foreclosed on his home and this lawsuit was filed.

At the trial level, the court found that Lueras could not state a claim.  On appeal, the court reversed the trial court’s ruling.  First, regarding a claim for negligence, the appellate court affirmed that a lender has no duty to a borrower if the lender acted within the conventional lender role.  However, the appellate court ruled that a lender is required to not misrepresent facts, such as the status of a loan modification.  Given BofA’s misrepresentation of the status of the foreclosure and loan modification, the Court found that Lueras could make a sufficient claim for BofA’s neligence.  This reasoning also held true for Lueras’s claim for fraud.  There, the Court held that a misrepresentation of the status of a foreclosure was actionable not only for negligence, but potentially for fraud.

Additionally, the Court held that when a lender enters a trial forbearance under the HomeSaver Forbearance plan, it must evaluate and identify a permanent solution within the first three months and implement the solution within six months.  The Court reasoned that because Fannie Mae issued guidance stating that a lender should do these things under HomeSaver Forbearance Program, Fannie Mae’s suggestions were binding for any forbearance agreements initiated under the program.  Further, while the court noted that “should” meant that the lender had discretion on what to do, the court also found that a lender was required to work in good faith with the borrower because the failure to do so was a breach of the covenant of good faith and fair dealing.  However, even with this duty, a lender is not required to offer a loan modification, but instead is merely required to identify what, if any, alternatives are available.

Takeaway - It is clear that the courts are becoming increasingly frustrated with lenders and are willing to create new duties and responsibilities in order to hold lenders accountable.  Previous cases have found that a lender does not have a duty to a borrower.  While some recent cases have held that a lender is required to grant a loan modification if a borrower qualifies for one, this case has gone even further in finding a lender liable for misstating the status of the application or of the foreclosure.  Lenders must now be extremely careful that any information they provide is as accurate as possible or face liability for their failings.  If you need assistance navigating these new standards, please do not hesitate to contact us at (650) 327-2900.

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Often the terms “mediation” and “arbitration” are used indiscriminately, but they mean entirely different things for the parties to an agreement containing these provisions.

1. What is Mediation?

Mediation is a way to resolve a dispute by mutual agreement. A successful result at mediation would be a voluntary settlement of the dispute by the parties. Usually both parties are compromising to arrive at the settlement. That means the claimant is receiving less than they want, and the respondent is giving up more than they want, but ultimately both parties decide it is better to compromise that to engage in further litigation.

In the context of real estate litigation, buyers may have a claim against the seller for failure to disclose a property condition or sellers may be claiming entitlement to the buyer’s deposit on a failed purchase.

Conducting a mediation often means hiring a “neutral” party as the mediator to facilitate getting the parties to a settlement.  According to the terms of the contract the mediator can be a retired judge or a seasoned practitioner.  The mediator attempts to help each side see the strengths and weaknesses of their position and the other parties’ position, and arrive at a compromise between the extremes.

The settlement is a voluntary, mutual decision that the parties decide they can all live with.

2. What is Arbitration?

In contrast, arbitration does not involve a voluntary, mutual decision by the parties.  Instead, the parties agree to designate an arbitrator (again, a retired judge or experienced attorney) who will make a unilateral decision after hearing evidence.

The parties will give testimony, present evidence, and at the conclusion of the presentations the arbitrator will render his or her “award.”  In short, it is a private trial taking place in a conference room instead of a courtroom, the parties are paying the arbitrator by the hour and there will be a winner and a loser.

3. How do mediation and arbitration provisions work in real estate contracts?

Most of the real estate contracts here in California come from a few specific publishers.  For example, the Peninsula Regional Data Service (PRDS) forms are frequently used in Santa Clara and San Mateo Counties but many other counties utilize the California Association of Realtors (CAR) forms.

Both the CAR and PRDS purchase agreements have a mandatory mediation[i] provision and an optional (elective) arbitration provision.  In fact, the parties initial the arbitration provision in order to invoke it, because it is not required.  If the parties initial the arbitration provision, they are agreeing to keep their dispute in a private setting rather than using the court system. By leaving it blank, the parties default to using the state’s judicial system in the event of a dispute.

Mediation is a pre-litigation requirement under these contracts.  That means that before the parties can take their dispute to court, they MUST first attempt mediation.  It is obviously intended to keep litigation costs down and give the parties an opportunity to reach a negotiated compromise in an expedited proceeding.

If you have any questions regarding mediation and arbitration provisions in a real estate contract in California, please do not hesitate to contact the Law Offices of Peter N. Brewer at (650) 327-2900 or on the web at www.BrewerFirm.com.


[i] There are a few exceptions, such as claims within the small claims dollar amount (below $10k).

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Potential Pitfalls for Real Estate Agents Assisting in Home Improvement Projects

by Simon Offord February 24, 2014 Real Estate Law

I was recently asked to speak at one of the local real estate associations about restrictions on real estate agents when assisting clients with repairs to property or preparing the property for sale.  It is a very interesting topic because it is a very common issue for real estate agents and has some potentially dangerous [...]

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Wrongful Foreclosure Blog Series

by Camille Rogers February 18, 2014 Foreclosure

The attorneys at the Law Offices of Peter N. Brewer put together a “Wrongful Foreclosure Blog Series.” We hope that this blog will serve you as guidance and contribute to increasing your awareness of your rights and obligations during the foreclosure process, as well as keep you alert to the potential pitfalls you may encounter [...]

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Expansion of California’s Anti-Deficiency Laws. Increased Protection for Borrowers After the Foreclosure of Purchase Money Loans.

by Julia Wei February 10, 2014 Foreclosure

Effective January 1, 2014, Senate Bill 426 went into effect and modified California’s anti-deficiency laws to do two things: 1)    Clarify the protection implied in the earlier versions of the statute that prevents lenders from trying to collect on “sold-out” purchase money junior loans; and 2)    Redefine “purchase money” to also include refinancing [...]

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