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Under well settled California law, “Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not by itself establish a partnership, even if the co-owners share profits made by the use of the property.” See Cal. Corp. Code § 16202(c)(1). “A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received for any of the following reasons: (C) In payment of rent.” See Cal. Corp. Code § 16202(c)(3)(C). Thus, California’s Uniform Partnership Act would require something more than mere co-ownership to establish a partnership between two co-tenants. Furthermore, co ownership does not in and of itself create a joint venture unless the following is established: (1) the members must have joint control over the venture (even though they may delegate it), (2) they must share the profits of the undertaking, and (3) the members must each have an ownership interest in the enterprise. See Scottsdale Ins. Co v. Essex Ins. Co., (2002) 98 Cal. App. 4th 86, 91.

If you are a co-owner or co-tenant in real property and have questions or concerns regarding your rights as a co-owner, contact one of our Los Angeles Real Estate Attorneys today for a free consultation and case evaluation.

An equitable servitude arises where one or more of the requirements of a covenant running with the land are not met, but the following conditions are met: (1) the subsequent owner of the servient estate has notice of the covenant; (2) the holder of the servitude is seeking equitable relief only (as opposed to a remedy at law); and (3) it is inequitable to deny the enforcement of the servitude. See In re Snow, 201 B.R. 968, 973 (C.D. Cal. 1996). The In re Snow Court relied upon the California Supreme Court’s holding under Nahrstedt v. Lakeside Village Condominium Association, (1994) 8 Cal. 4th 361, when it defined an equitable servitude under California law.

The In re Snow Court went on to state that “The chief requirement for an equitable servitude is that a successor, against whom enforcement is sought, have notice of the equitable interest at the time that the successor obtains an interest in the property. See In re Snow supra at 973.

If you are a homeowner and have land use enforcement issues, contact one of our Los Angeles Real Estate Attorneys today for a free consultation and case evaluation.

The filing and recording of a lis pendens is often times a civil mechanism used in real property disputes. Before filing a lis pendens, a litigant should understand his/her burden of proof if and when the lis pendens is challenged by an opponent. Opponents to a lis pendens will file a Motion To Expunge the Lis Pendens and should they prevail, they may be entitled to attorney fees. Thus, the filing and recording of a lis pendens is not without consequence.

A court will not expunge a lis pendens if the filer can prove, by a preponderance of the evidence, the probable validity of their real property claim. See C.C.P. § 405.32. “Probable Validity” “with respect to a real property claim, means that it is more likely than not that the claimant will obtain a judgment against the defendant on the claim.” See C.C.P. § 405.3. Thus, a real property claim should be carefully scrutinized for its probable validity prior to the filing and recording of a lis pendens.

If you have questions regarding a real estate matter, contact one of our Los Angeles Real Estate Attorneys for a free consultation and case evaluation.

Under existing law, a broker must retain for three years copies of all listings, deposit slips, canceled checks, trust records, and other documents executed by him or her or obtained by him or her in connection with any transactions for which a real estate license is required. Effective January 1, 2015, electronic messages of an “ephemeral nature” such as text messages, instant messages, and tweets (unless designed to be retained or to create a permanent record) are excluded from this record retention requirement. The new law, however, does not clearly exclude emails from record retention requirements. Therefore, emails sent and received in connection with a transaction should still be retained. AB 2136 (codified as Business and Professions Code §10148 and Civil Code §1624) (effective January, 2015).

A broker who fails to retain transaction records for a period of three years may be cited by the Bureau of Real Estate and subject to formal legal action. You should review the record retention policies for your office to make sure you are in compliance with this code section.

If you are a real estate agent or broker and have a legal question, contact one of our Los Angeles Real Estate Attorneys for a free case evaluation and consultation.

Executing an “Exclusive Authorization and Right to Sell” agreement with a broker does not create the authority in the broker to sell the property by binding the seller to a purchase contract with a buyer. It is merely the authority to invite or procure prospective purchasers. See Holway v. Malloy, (1945) 70 Cal. App.2d 317, 319 (“Authority given to a broker ‘to sell’ real property, in listing it for sale, only authorizes him to find a purchaser; it relates to the services to be performed by the agent in order to earn the agreed compensation and does not make him the agent of the owner to enter into a contract of sale. This is a well established canon of the law of real property.”) Thus, the listing agreement only confers a right to bring buyers to the table, not to bind the buyer and seller to a deal.

If you are a seller or buyer of real estate, or if you are an agent or broker and have a question regarding a real estate transaction or deal, contact one of our Los Angeles Real Estate Attorneys for a free consultation and case evaluation. Our Real Estate Attorneys are also licensed California Real Estate Brokers. (888) 693-5556.

Implied in fact modifications have been consistently recognized under California law in that the parties’ modification setting aside the written provisions will be implied wherein the subsequent conduct of the parties is inconsistent with and clearly contrary to provisions of the written agreement. See Diamond Woodworks, INc. v. Argonaut Ins. Co., (2003) 109 Cal. App. 4th 1020, 1038 (overruled on other grounds); see also Garrison v. Edward Brown & Sons, (1944) 25 Cal. 2d 473, 479 (“Before a contract modifying a written contract can be implied, the conduct of the parties according to the findings of the trial court must be inconsistent with the written contract so as to warrant the conclusion that the parties intended to modify the written contract.”); see also Wagner v. Glendale Adventist Medical Center, (1989) 216 Cal. App.3d 1379, 1388 (“When one party has, through oral representations and conduct or custom, subsequently behaved in a manner antithetical to one or more terms of an express written contract, he or she has induced the other party to rely on the representations and conduct or custom. In that circumstance, it would be equally inequitable to deny the relying party the benefit of the other party’s apparent modification of the written contract.”) Moreover, The existence of the implied modification is a question of fact to be proven by a preponderance of the evidence. See Keeble v. Brown (1954) 123 Cal. App. 2d 126, 132 (“Whether a writing has been modified by an executed oral agreement is a question of fact.”)

If you have a question concerning a contract such as a commercial lease agreement and its interpretation, contact one of our Commercial Lease Attorneys in Los Angeles today for a free consultation and case evaluation.

Buyers and Sellers in a standard California real estate purchase and sale each have obligations to fulfill which the completion of the contract are contingent upon, the failure of which may be grounds to cancel the purchase and sale agreement pursuant to Cal. Civ. Code § 1434 (“An obligation is conditional, when the rights or duties of any party thereto depend upon the occurrence of an uncertain event.”) For example, sellers are under a statutory duty to make certain disclosures regarding the property (see paragraph 6 of California Residential Purchase Agreement) and buyers have a duty to lift loan and inspection contingencies under the same purchase agreement. The failure of a party to perform certain contingencies is grounds for cancelation.

If you are a buyer or seller of real estate in California and are faced with contract related issues, contact one of our Los Angeles Real Estate Attorneys today for a free consultation and case evaluation.

California Code of Civil Procedure Section 386 authorizes the private right of action known as Interpleader. Section 386 authorizes Escrow to initiate an interpleader action where the parties (often times buyer and sellers disputing amounts owed) have competing claims over property (usually money).

Escrow as the Interpleader, whether initiating the action or later interpleading may deposit any amount which a plaintiff or cross-complainant admits to be payable with the clerk of the court at the time of the filing of the complaint or cross-complaint in interpleader without first obtaining an order of the court therefor. Any interest on amounts deposited and any right to damages for detention of property so delivered, or its value, shall cease to accrue after the date of such deposit or delivery. See Section 386(c).

Escrow seeking interpleader is not required to show that any claimant has a good claim, but only that the claimants make claims for the same thing, that their respective claims are adverse to each other, and that the party seeking interpleader cannot safely determine for himself or herself which claim is right and lawful. See Fidelity Sav. & Loan Ass’n v. Rodgers, (1919) 180 Cal. 683.

Once the property in dispute is deposited with the clerk of court, the Escrow may apply for its costs and fees and be asked to be discharged from the action leaving the adverse parties to litigate over the property or money deposited with the Court.

Under Cal. Bus. & Prof. Code § 10137, It is unlawful for any licensed real estate broker to employ or compensate, directly or indirectly, any person for performing any of the acts requiring a license, who is not a licensed real estate broker, or a real estate salesperson. Simply stated, unlicensed persons are not entitled to real estate commissions. A broker may share a commission with the principal who is not performing services for which a license is required. See Williams v. Kinsey, (1946) 74 Cal. App. 2d 583. However, unlicensed persons, performing services requiring a license may not be compensated. That is not to say that certain services performed by unlicensed persons could not be compensated. For example, property managers gathering financial data or rent schedules could be compensated as those services are not such as to require a license. See Venturi & Co. LLC v. Pacific Malibu Development Corp. (2009) 172 Cal. App. 4th 1417, 1422. Thus, if escrow instructions call for the compensation of unlicensed individuals, then that compensation must be scrutinized to ensure that the unlicensed person is not being paid for services rendered requiring a license.

If you are a real estate agent or broker, or if you are a buyer or seller of property and have questions regarding real estate commissions, contact one of our Los Angeles Real Estate Attorneys today for a free consultation and case evaluation.

Pursuant to the Civil Code A person shall not record a notice of intent to preserve an interest in real property for the purpose of slandering title to the real property. If the court in an action or proceeding to establish or quiet title determines that a person recorded a notice of intent to preserve an interest for the purpose of slandering title, the court shall award against the person the cost of the action or proceeding, including a reasonable attorney’s fee, and the damages caused by the recording. Thus, attorney fees can be recoverable in actions where a recording slandering title seeks to clear title. See also Sumner Hill Homeowner’s Assn., Inc. v. Rio Mesa Holdings, LLC, (2012) 205 Cal. App. 4th 999, 1031 (“we hold that at least in cases such as this one where title was disparaged in a recorded instrument, attorney fees and costs necessary to clear title or remove the doubt cast on it by defendant’s falsehood are, by themselves, sufficient pecuniary damages for purposes of a cause of action for slander of title.”)

If a recording is disparaging clean title to your property, contact one of our Los Angeles Real Estate Attorneys today for a free consultation and case evaluation.