Category: Areas of Practice

Broker Duties Regarding Visual Inspections – Cal. Civ. Code § 2079 et seq.

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A real estate broker or agent owes a prospective purchaser of a residential real property comprising of 1 to 4 units, a duty to conduct a reasonably competent and diligent visual inspection of the property offered for sale and to disclose to that prospective purchaser all facts materially affecting the value or desirability of the property that an investigation would reveal, if that broker has a written contract with the seller to find or obtain a buyer or is a broker who acts in cooperation with that broker to find and obtain a buyer. See Cal. Civ. Code § 2079(a). However, there are some limitations with respect to the extent of that inspection. The standard of care owed by a broker under California law is the degree of care that a reasonably prudent real estate broker or agent would exercise and is measured by the degree of knowledge through education, experience, and examination, required to obtain a broker/agent license. See Cal. Civ. Code § 2079.2.

These duties to disclose carried by the selling broker/agent do not relieve a buyer or prospective buyer of the duty to duty to exercise reasonable care to protect himself or herself, including those facts which are known to or within the diligent attention and observation of the buyer or prospective buyer. See Cal. Civ. Code § 2079.5.

The scope of inspection is also somewhat limited in that it does not involve or include an inspection of areas that are reasonably and normally inaccessible to such an inspection, nor an affirmative inspection of areas off the site of the subject property or public records or permits concerning the title or use of the property. See Cal. Civ. Code § 2079.3.

Prospective buyers should also be aware that if a breach or nondisclosure within the scope of duties outlined under Section 2079 et. seq., is discovered, the buyer has two years from the date of possession, which means the date of recordation, the date of close of escrow, or the date of occupancy, whichever occurs first, in order to bring an action against the selling agent/broker. See Cal. Civ. Code § 2079.4. This two year statute does not affect the 3 year statute for intentional fraud, nor does it affect the 4 year statute for breach of fiduciary duty claims.

It is also important to note that these rules regarding an agent’s duty to disclose defects visible to him/her during escrow, do not diminish the duty of disclosure owed to buyers by agents from liability for their conduct in connection with acts governed by these rules or for any breach of fiduciary duty or a seller’s legal duty of disclosure. See Cal. Civ. Code § 2079.24.

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Our HOA Dispute Attorneys in Los Angeles successfully opposed a demurrer brought by an HOA against our client claiming that our client’s lawsuit against the HOA should be dismissed because our client did not certify that alternative dispute resolution (ADR) was attempted before filing the action pursuant to Cal. Civ. Code § 1369.520. The court denied the dismissal attempt by the HOA and held that Davis Stirling does not require an ADR certificate to be filed along with the complaint wherein the damages exceed $10,000. This ruling is entirely consistent with the code section which reads as follows:

This section applies only to an enforcement action that is solely for declaratory, injunctive, or writ relief, or for that relief in conjunction with a claim for monetary damages not in excess of the jurisdictional limits stated in Sections 116.220 and 116.221 of the Code of Civil Procedure.

Thus, if you have an HOA dispute and it either arises out of an assessment dispute or you claim monetary damages in excess of $10,000, then you need not comply with the ADR certification as required under Davis Stirling.

If you have an HOA Dispute, contact one of our Los Angeles Attorneys today for a free case evaluation and consultation.

Eviction Actions – Calculating Notice Periods

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The prerequisite to any eviction action in Los Angeles is the proper service of the three day notice to pay rent (or cure breach) or quit. Service must be made either personally on the tenant or posted to the door and mailed. As important for landlords is the proper calculation of the three day notice period. Pursuant to California Civil Jury Instruction No. 4303, The three day notice period begins the day after the notice was given to the tenant or delivered to the premises and if the last day falls on a Saturday, Sunday or holiday, the tenant’s time to pay the rent or vacate the property is extended to include the first day after the Saturday, Sunday or holiday that is not also a Saturday, Sunday or holiday.

Failure by a landlord to adhere to these rules may result in a failed eviction action. If you are a landlord and need to evict a tenant or initiate an eviction action, call or email one of our Los Angeles Eviction Attorneys today for a free consultation and case evaluation.

Commercial Lease Disputes – Unreasonable Withholding Of Consent By Landlord To Assign or Sublease

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Commercial Landlords in Los Angeles who incorporate restrictions on a tenant’s ability to transfer or assign the commercial lease subject to the landlord’s consent wherein the standard that the landlord’s consent may not be unreasonably withheld, must be aware that a finding that consent was “unreasonably” withheld will give rise to the tenant’s right to bring an action against the landlord for contract damages or give the tenant the right to terminate the lease. See Cal. Civ. Code § 1995.310.

In addition to said contract damages for the unreasonable withholding of consent, a landlord may be faced with tort claims by a tenant such as tortious interference with prospective economic advantage or trespass. The reasonableness of withholding consent would necessarily be a question of fact for a fact finder to decide. Thus, commercial landlords are advised to objectively scrutinize their reasons for withholding consent on an assignment or sublease. If you are a commercial landlord and have a lease dispute, contact one of our Commercial Lease Attorneys in Los Angeles for a free consultation and case review.

Evicting Tenants For Nuisances Or Unlawful Use Of Property

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Our Los Angeles Eviction Attorneys were recently asked to analyze an eviction based upon a tenant’s conducting constituting a nuisance. Under Los Angeles Rent Control “for cause” evictions, a nuisance or use of the property for an illegal purpose is just cause to evict upon the proper service of a three-day notice.

The landlord would carry the burden to demonstrate that the tenant no longer has the right to occupy the property because the tenant has created a nuisance on the property or is using the property for an illegal purpose. To carry this burden of proof, the landlord must demonstrate all of the following: (1) that landlord owns/leases the property at issue; (2) that landlord rented the property to the tenant defendant; (3) that the tenant defendant created a nuisance on the property (conduct constituting the nuisance must be specified and proven more likely than not to have occurred); or that the tenant defendant used the property for an illegal purpose; (4) that the landlord properly gave the tenant defendant three days’ written notice to vacate the property; and (5) that the tenant defendant is still occupying the property. See California Civil Jury Instructions No. 4308.

Therefore, a nuisance caused by a tenant is grounds for eviction, even in rent control “for cause” jurisdictions. If you have questions regarding evicting a tenant, call or email one of our Los Angeles Eviction Attorneys today for a free consultation and case evaluation.

Landlord Tenant Disputes – Written Consent to Sublease

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Landlords, whether commercial or residential, should include in their written lease agreements, the covenant requiring a tenant or lessee to obtain a landlord’s express written consent before a sublease. Often times, this provision and operation is overlooked by landlords because the rent continues to be paid. However, without the express written consent of the landlord, a sublease would constitute a breach. See Boston Properties v. Pirelli Tire Corp., (1982) 134 Cal. App. 3d 985, 992. The question our Los Angeles Eviction Attorneys are often faced with is whether the landlord, with knowledge of the unauthorized sublease, but without written consent, would nevertheless be held to have waived the express covenant in the lease. Particularly, this issue may be problematic for landlords of residential leases subject to rent control rules which limit an eviction to “for cause” reasons (i.e., failure to pay rent.)

A waiver defense would be brought by the tenant subletting in an eviction trial and a factual finding could be made as to a waiver by the landlord with respect to the subletting tenant he/she had knowledge of. Subsequent unauthorized tenants would again need the express written consent of the landlord. Essentially, a landlord waiving his/her right to expressly approve a sublease once, does not discharge the express covenant in the lease going forward.

If you have a landlord tenant dispute, talk to one of our Los Angeles Eviction Attorneys today.

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Often times, HOA disputes arise from issues and matters that are documented or arise from financial documents, contracts or other writings, fiscal or otherwise. Cal. Civ. Code § 5200 et seq. provides the statutory obligation of an association to provide certain “Association records” upon request.

“Association Records” means all of the following: (A) Any financial document required to be provided to a member; (B) Any financial document or statement required to be provided by Davis Stirling; (C) Interim financial statements, periodic or as compiled, containing any of the following: (i) Balance sheet; (ii) Income and expense statement; (iii) Budget comparison; (iv) General ledger; (D) Executed contracts not otherwise privileged under law; (E) Written board approval of vendor or contractor proposals or invoices; (F) State and federal tax returns; (G) Reserve account balances and records of payments made from reserve accounts; (H) Agendas and minutes of meetings of the members; (I)(i) Membership lists; and (J) Check registers.

Should an association refuse to provide requested documents, it must provide the legal basis for denying such a request. Section 5200 et seq. provides members a right to enforce the availability and production of Association Records.

If you have an HOA Dispute, contact one of our HOA Dispute Attorneys in Los Angeles.

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Cal. Civ. Code § 5975 authorizes a homeowner subject to particular CC&Rs, to bring an enforcement action against another HOA member or the HOA to enforce a covenant, condition or restriction. Often times, such an enforcement action warrants injunctive relief as well. When our HOA Dispute Attorneys endeavor to seek a preliminary injunction, the question then becomes, what action is necessary to seek enjoinment of, or is it necessary to seek to compel the association to enforce CC&R provisions.

These questions are critical since an action seeking enforcement of CC&Rs as against an HOA will usually be met with the argument that the HOA alone has the discretion to determine how to enforce its CC&Rs. However, California courts have held that when an association refuses to enforce its CC&Rs, a homeowner may seek injunctive relief compelling it to do so. See Lamden v. La Jolla Shores Clubdominium Homeowners Assn., (1999) 21 Cal. 4th 249, 268.

Thus, an injunction directing an HOA utilize all enforcement mechanisms available to it necessary to enforce the CC&Rs can issue, and has been upheld in California courts. See Ekstrom v. Marquesa at Monarch Beach Homeowners Ass’n, (2008) 168 Cal. App. 4th 1111, 1125.

Property Owners Cannot Claim Ignorance Of CC&R Rules If Violated

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It is well settled California law that constructive notice of a document affecting real property is conclusively presumed where said document is recorded as prescribed by law or indexed in the public records.  See Cal. Civ. Code § 1213; see also First Bank v. East West Bank, (2011) 199 Cal. App. 4th 1309, 1314.  Generally, CC&Rs are recorded instruments indexed in the public record.  Thus, violation of a covenant or restriction affecting real property subject to the CC&Rs, is not excused or otherwise permissible if the violating property owner claims ignorance or lack of awareness or knowledge of the CC&R rules.  As a matter of California law, a property owner is charged with actual knowledge of recorded documents affecting real property which he/she holds title to.

Real Estate Agents – Disgorgement Of Commissions Allowable Under CA Law Where There is Bad Faith

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A real estate agent who breaches the duty of good faith is precluded from recovering a commission for services rendered upon a showing that the breach was founded in fraud or intentional deceit. See Ziswasser v. Cole & Cowan, Inc., (1985) 164 Cal. App. 3d 417, 432 (Holding that a breach of fiduciary duty involving intentional disloyalty or bad faith required before a broker will be deprived of his/her right to a commission.)

Thus, a real estate broker’s commission could be disgorged in the event a principal shows intent and/or bad faith on the part of the agent.