How Commercial Tenants Should Protect Themselves When Leasing a Property

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For brick-and-mortar businesses, the commercial space they rent is not only one of the key components in their operational costs, but it also plays an important role in the success of their business. Several commercial landlords and tenants in California get into disputes over issues related to the condition of the property, upkeep and maintenance, and various other matters.

There are a number of things you should consider before signing a lease because every legal clause and paragraph has the potential to impact your company. This makes it important to have a consultation with a qualified real estate attorney in California, who can review the terms and conditions of the commercial property lease, make appropriate recommendations, and provide the right legal advice to protect your interests.

Review All Terms of the Lease Carefully

The overall value of the commercial real estate sector in the US is around $16 trillion as per the National Association of Real Estate Investment Trusts (NAREIT). Businesses can easily become overwhelmed when searching for a commercial property with so many options. Commercial tenants often focus on rental rates and locations when searching for a new property.

Based on this, it’s as crucial to review the lease agreement. In fact, you should get an experienced attorney to carefully review the specific details of the lease agreement. The lease is what controls your rights and interests if a dispute or problem arises. These are a few terms to pay attention to:

  • Late payments: Commercial leases should clearly mention the terms of late rent. It should specify the amount of interest and an additional charge for late payments. This gives you a clear idea of what will happen on nonpayment of rent.
  • Use clauses: These clauses will list out the things you can and cannot do with the commercial space as a tenant. It will also dictate the manner in which any disputes are to be handled if multiple tenants lease the same building. There may be a limited use clause that permits you to use the space for specific purposes till authorized capacity.
  • Assignment and subletting: Commercial tenants are typically allowed to sublet or assign space as per the terms of the lease unless the commercial lease specifies otherwise.
  • Non-Waiver provisions: This is actually a protection for the landlord to enforce any terms that they may have allowed to slide in the past. For instance, your landlord may not enforce a late payment charge if you are late on the rent the first time, but does it the second time.
  • Security deposit: California law places no restrictions on the amount of security deposit a landlord can request for a commercial space. Your attorney will negotiate with the landlord to come up with a fair amount.
  • Repairs and maintenance: Commercial landlords are not required to maintain or repair a commercial property, except as required by the lease. Tenants should negotiate the repair and maintenance clause to obligate the landlord into making repairs.
  • Insurance: These clauses dictate whether you, the landlord, or both of you are required to obtain insurance for the space, the minimum amount of insurance required, and the type of insurance needed.

Pay Attention to the Clauses on Liability Risks

Your liability risk is a key factor to investigate when evaluating a commercial lease. Commercial landlords often try to shift a large share of the risk onto their tenants. You may end up accepting a far greater liability risk if you fail to review the specific terms and clauses of the lease agreement. Common Area Maintenance (CAM) charges are an important thing to look out for.

This is also known as NNN or triple net lease. CAM charges are basically in the form of a fee paid to the landlord. It’s designed to cover the expenses of running day-to-day operations. The CAM fees are usually proportional to the total rental obligations where the common space is shared with other commercial tenants.

CAM charges can be used for paying for landscaping, trash removal from common areas, and elevator upkeep. Repairs and improvement to the commercial property is another critical provision to look out for. You should check if the landlord can pass on repair and improvement costs to your business.

You should also clarify how the expenses are charged if the costs do get passed on to you. The cost may be in the form of a lump sum payment or get amortized over several years.

Negotiate the Terms and Conditions of Your Commercial Lease

In general, commercial lease agreements can be negotiated. Based on this, there are a few take-it-or-leave-it options as well. It’s vital that you consult with a seasoned real estate attorney and have them review the lease terms. Your attorney will give you specific advice on the meaning and implications of the different terms and clauses.

You may be able to talk your landlord into certain amendments that reduce your overall risk. Your attorney will help you decide on a lease agreement that offers a fair rental rate and ensures that your business is protected from unreasonable liability risks.

Get Legal Representation from Skilled Real Estate Attorneys in California

The seasoned real estate attorneys at Peterson, Martin & Reynolds LLP have the legal experience and skills to draft, review, and negotiate commercial lease agreements. If you are renting a commercial property and have questions about the lease, our informed attorneys are here to help. To set up a consultationwith us today, call us at (415) 849-2564 or write to us online.

 

Do Easements Transfer with The Sale of Property in California?

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Easements provide an individual or entity to use a portion of private property for a specific purpose. These non-possessory rights are typically mentioned in the property deed but could be missed out in certain situations. Easements that are not specified in a property deed usually come to an end when the property is sold, the grantor passes away, or an expiration date has been reached.

It’s crucial that you speak with a reliable real estate attorney in California because there might be unique circumstances that keep the easements active even when the property is sold.

Effect of Sale on Different Types of Easements in California

The basic framework for easements in California Civil Code is detailed between sections 801 – 813. The framework provides an overall look at easement guidelines that landowners and city officials are required to adhere to. This is how different types of easements are treated when a property is sold in California.

  1. Express Easements

Express easements are the most common type of easement in California. These can be obtained by both individuals and entities via a reservation or grant. Express easements when granted give another entity or individual the right to use a portion of the land for right-of-way purposes.

Express easements when reserved, refer to an easement that has been transferred with the property on sale of the land from one individual to another. The original owner in this situation reserves the easement for the benefit of the individual or entity.

  1. Implied Easement by Existing Use

Implied easement by existing use is a different type of easement in which the law states that there is a previously implied easement between two parties. This is even when there is no record of a written agreement. The individual or entity that believes that they are able to use a part of the property as an easement will need to show that they were earlier able to use the property for a specific purpose.

  1. Easement by Necessity

This type of easement occurs when the specific use of land is absolutely necessary. This type of easement doesn’t need any pre-existing easements on the land. Any easement on the land will automatically get transferred when the property is sold. Easement by necessity is usually provided when someone’s property is landlocked and the only way through is by using a portion of another’s property.

  1. Prescriptive Easement

A prescriptive easement is a type of easement that is granted to an individual or entity after they continue to use a portion of another’s land for a certain period of time. A prescriptive easement may still be granted if the use of land was not permitted by the owner.

Building on a Property with Easement

Utility easements are the most common type of easements on California property. Many property owners believe that they won’t be allowed to build on a property if it has a utility easement. This is not entirely true. You can do a lot of different things with your property as long as you don’t interfere with the ability to use and access the area for water, sewer, gas lines, or any other utility purpose.

If you have an easement in gross on your property, the individual can use it as a right of way, for burial purposes, for the right to pasture, and for fishing among other things. You can always build something simple on an easement, such as a fence. Moreover, you need to remember that the fence can always be taken down to use the easement. The utility company will do everything possible to repair the fence as best as they can.

Many property owners also build hot tubs and pools on easements. Above-ground pools can be easily removed when the easement has to be used. You should refrain from planting trees and other large vegetation. Based on this, you can always have a flower bed or shrubs.

Terminating Easements on a Property

Easements are typically designed to continue for an indefinite period. In relation to this, there are several ways for a property owner to terminate easements. This includes:

  • Express agreement: You can get into an agreement with the easement holder to terminate the easement.
  • Abandonment: In this, the easement holder takes action that stops them from using the easement.
  • Merger: Dominant estate owner can obtain the title to the servient estate.
  • Ending by necessity: This occurs when the easement is no longer deemed to be necessary.

It’s fundamental to understand that abandonment needs to be permanent. Not using the easement for a short period of time doesn’t refer to abandonment. There are several other nuances that come into play making it important to retain the services of a skilled real estate attorney.

Our Trusted Real Estate Lawyers Can Provide You with Strong Legal Advice and Support. Call Now.

At Peterson, Martin & Reynolds LLP, we pay attention to our clients and pursue their interests with a steadfast commitment and sharp focus. Our seasoned attorneys have an in-depth understanding of California’s real estate laws and will carefully evaluate your issues and concerns to provide you with the right legal advice. To book your consultation with our team, call us at (415) 849-2564 or reach us online.

Disclosure Requirements of California Real Estate Brokers

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Real estate agents in California are required to disclose certain information before transferring property. If the real estate broker fails to disclose what is required by law, they can be held liable for actual damages suffered by the buyer. You should consult with an experienced real estate attorney in California if you are unsure of disclosure requirements or have suffered damages because of a lack of disclosure.

Necessary Information to be Disclosed by a Broker in California

Real estate professionals representing sellers are required to ascertain any known defects or hazards on the property. They should also find out about other factors that may affect the sale. These need to be disclosed to the buyer’s representative to determine whether they are still interested in holding negotiations.

Arguably, the duty to disclose known defects and hazards on a property is the most critical one. This information generally affects the buyer’s ultimate offer and the view of the sale. Federal law requires sellers to disclose if the house has lead-based paint or was built before 1978.

These are a few other material defects that real estate brokers in California are required to disclose:

  • Foundation issues and other structural defects
  • Presence of mold
  • Plumbing problems
  • Flood zone
  • Pest or termite issues

Real estate brokers have a fiduciary duty to disclose other pertinent information to both the seller and buyer. This includes factors that may affect the negotiations, sale value, and moving forward. Other aspects that warrant full disclosure include:

  • Offers from potential buyers
  • Seller’s urgency to sell the property
  • Whether either party will move on the offer or price
  • Property value estimate
  • Conflicts of interest

Sale Disclosures by Real Estate Professionals

Real estate professionals are also required to disclose all known hazards and defects on a property. The seller needs to be truthful and their agent should ensure that all known defects and hazards are disclosed to potential buyers.

It’s important to understand that California law doesn’t subject unknown defects to full disclosure requirements. These are the defects that the owner and the broker were unaware of.

However, this situation may warrant liability for non-disclosure if the owner and real estate agent missed something they should have caught had they performed due diligence. It is best to complete an appropriate investigation and disclose any suspected issues. The disclosures made should be in writing to protect everyone involved in case of a dispute.

Potential Damages if a Real Estate Broker Fails to Meet Disclosure Requirements

The buyer or seller may have grounds for filing a lawsuit to recover damages if the real estate broker fails to make full disclosure. This may include:

  • Economic damages: This could include lost money or profits from repairs.
  • Noneconomic damages: These damages are in the form of pain and suffering and usually result from a breach of fiduciary duty.
  • Punitive damages: Such damages are generally available only for serious nondisclosures. They are meant to punish egregious behavior that severely affects the buyer’s health.

It’s crucial that you have all aspects of the sale in writing in case the broker fails to fully disclose the hazards and defects in a particular property. Make sure you consult with an experienced real estate attorney.

You should provide the attorney will all documents and records regarding the dealings. Conversations regarding offers and home disclosure forms are a few essential documents.

Important Real Estate Seller Disclosures You Should Be Aware of in California

These are a few common disclosures that you should be aware of, regardless of whether you are on the seller’s side or the buyer’s:

  • Death: There are superstitions and concerns associated with purchasing a house or a property in which someone has died. Brokers should make adequate disclosures regarding this. Sellers should also disclose any deaths related to violent crimes or because of the property’s condition.
  • Neighborhood Nuisances: Odor or noise from outside the property could cause irritation to the property occupants. Brokers are required to disclose odors, smoke, noises, and other nuisances from industrial, commercial, or military sources that may affect the property occupants. The broker may also require the disclosure of nearby farm operations, landfills, shooting ranges, airports, and other similar nuisances.
  • Hazards: Real estate brokers are required to disclose certain information to the buyer regarding the increased risk of damage from environmental contamination and natural disaster. California requires the disclosure of the presence of toxic or hazardous waste, radon gas, asbestos, and lead-based paint.

These are just a few common examples of defects, hazards, and other factors that a real estate broker or agent may need to disclose during a sale. Speak with an attorney if you think you suffered damages because of non-disclosure.

Our Seasoned California Real Estate Lawyers Can Provide You with Strong Legal Representation

The experienced attorneys at Peterson, Martin & Reynolds LLP can help ensure that all laws are followed regarding disclosure and other aspects if you haven’t yet completed a sale. Our attorneys can also help you file a lawsuit and represent your interests in court if there is an ongoing disclosure dispute.

The law firm of Peterson, Martin & Reynolds takes real estate litigation very seriously and strongly believes in providing every client with dedicated representation. We are happy to provide you with a comprehensive case evaluation. Call us at (415) 849-2564 or reach us online.

What Is Just Compensation in An Eminent Domain Case?

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In California, eminent domain gives public authorities the power to take privately held property, even where the owner of the property doesn’t want to sell. The Fifth Amendment has made it mandatory for eminent domain to be employed only for “public use,” such as for bridges, roads, schools, and hospitals among others. The government is required to pay the property owner “just compensation.”

It will take an experienced real estate attorney to evaluate the circumstances surrounding your case and ensure you are getting just compensation.

Just Compensation in California

Just compensation in a situation where there is the total taking of the property is simply the present value of the entire property. In a partial taking scenario, just compensation can be calculated as the difference between the property value before the taking and after the taking.

This means the difference between the before and after the value of a property. This difference is the total amount of just compensation due.

The standard for determining just compensation is to basically place the property owner in the exact same economic position as they would have been if the government had not taken the property. This generally involves a battle of expert appraisers for determining the best use of the property. There may be a disagreement between the property owner and these experts regarding the taking value.

The court will ultimately decide the value at trial after extensive pre-trial procedures if common ground cannot be attained by the court. This will include ascertaining a mandatory settlement offer from the taking authority, which the property owner will need to accept.

The typical issue in an eminent domain case is the infringement on an owner’s right to obtain just compensation for the property being possessed. The State and Federal law of eminent domain allow the court to calculate just compensation for taking real property wherever the owner of the property contests the compensation amount.

Factors Involved in Calculating Just Compensation in California

Fair Market Value of Land

This is the price the property owner will receive if they were willing and not forced to sell the land. This can be used for determining the fair market value of the land. For instance, the sale price the landowner will receive if they were to auction their property can be considered as fair market value.

Fair Market Value of Land Improvement

Land improvement refers to those structures, which enhance the value of the seized land. This can be barns, detached dwellings, and separate garages. Intangible land improvements need to be taken into consideration as well. For instance, land near a scenic area or one with natural resources can be considered a land improvement.

Residual Damage

This is a relevant factor in partial land takings. Just compensation needs to include the fair market value of the part being seized along with any decrease in the sale value of the remaining land. It’s also vital to consider whether the residual property can still be put to its best and highest use. There are several factors that can damage the value of the remaining property.

Other Damages

These are ancillary damages that are again related to partial taking. These ancillary damages include the costs associated with replacing utilities servicing structures on the remaining land. For instance, if the property seizure removed a buried oil tank that serviced a dwelling, the property owner will need to pay the costs of installing a new one. Such costs should be factored in determining just compensation.

Benefits

It is important to understand that the government can also deduct the value of any enhancements made by the condemnation to the remaining property. This deduction will be made in the form of a benefit from the total eminent domain payment made.

Methods of Eminent Domain Property Valuation

These are the three commonly used methods of valuing a property during eminent domain:

Market Approach

The seized property is compared to the sale value of a property recently sold with similar characteristics. This type of valuation is usually used for appraising residential properties.

Income Approach

This is best used for properties that generate income. The operating income of the property needs to be determined first. Capitalization rate and income are then used to arrive at the value.

Cost Approach

This approach considers a very specific and unique structure of the property that the owner will need on any future property. In such an approach, the cost of replacing the new structure minus any depreciation on the structure is added to the value of the empty land.

You should understand that the government’s offer is not always “just compensation”. You don’t need to accept the offer only because you receive a Notice of Condemnation supported by a written appraisal. You have important rights under California law to ensure you are fairly compensated for your property.

Choose an Experienced Real Estate Lawyer to Pursue a Viable Legal Strategy

The seasoned attorneys at Peterson, Martin & Reynolds LLP have experience with public agencies looking to use eminent domain to seize property without paying fair compensation. Our attorneys work hard to ensure that our client’s rights are protected and that they obtain just compensation. To request your comprehensive consultation, call us at (415) 849-2564 or complete this online form.

What Are the Landlord’s Remedies When a Tenant Breaches a Commercial Lease?

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In California, commercial tenants generally have several additional obligations that go beyond paying the monthly rent. This may appear to benefit landlords, but it can also mean significant losses in case the tenant decides to default on the lease. An experienced northern California real estate attorney will be able to explain the available legal remedies for recovering damages if your tenant defaults on the terms mentioned within the commercial lease.

Type of Commercial Lease Breach

The first step a landlord should take when a tenant breaks the commercial lease is to determine the type of default or breach that has occurred under the law. A seasoned real estate attorney can provide the right legal advice in this matter.

There are different remedies available depending on the nature of the default. Breach of commercial lease usually falls into two categories:

  • Monetary default: This is where the tenant fails to fulfill contractual obligations, such as rent or utility payments.
  • Nonmonetary default: This is where another contractual obligation is breached, such as failure to have proper insurance, damaging the property, or using the property for unintended or non-permitted use.

You should note the terms of your particular lease agreement since many of these allow you to convert non-monetary lease agreements to monetary in nature. For instance, if you agree to repair the damage caused by non-monetary defaults, you can add the cost to your tenant’s rent. It can be harder to enforce remedies to nonmonetary defaults as compared to monetary ones.

Remedies Available to Commercial Landlords in California

Landlords can take further action if a commercial tenant fails to remedy the breach within a reasonable or applicable notice period. The primary decision that needs to be taken by a landlord is to whether end the lease and evict the tenant or preserve the relationship while still recovering damages.

Preserve the lease

Landlords in California have four primary remedies when they want to preserve the lease agreement:

  • Distraint: Landlords (usually with a bailiff) are allowed to enter the premises and seize goods of a value matching the outstanding monies owed. Strict rules are in place to govern distraint. You may be exposed to liability for damages if these rules are breached.
  • Damages: The tenant can be sued by the landlord for monetary damages resulting from the tenant’s default.
  • Injunction: This is a court order which forces an individual to stop doing something. The landlord may seek an injunction for stopping a tenant from using the leased premises for operating a business that is not permitted through the lease, for example.
  • Specific performance: Commercial landlords can seek an order for specific performance in certain circumstances. These force the tenant to act in a specific manner. For instance, the tenant may be required to repair damages as per the order.

Terminate the lease

You may decide to terminate the landlord-tenant relationship, in which case you have three available remedies that can be used together or separately:

  • Forfeiture: Written notices are provided by the landlord for the purpose of lease termination. This remedy is usually enforced to prevent a tenant from entering the premises.
  • Writ of possession: This court order allows the bailiff to take possession of the property on behalf of the landlord. It’s useful in situations where it is not practical to physically exclude the tenant from the premises.
  • Damages: The landlord may choose to seek damages as a result of the lease termination. This usually involves lost future rent payments. Taking this into account, the landlord also has a duty to minimize losses by finding another tenant quickly.

Claiming Monetary Damages for a Breach of Lease in California

Tenants are liable for rent owed under the lease terms if they breach a lease. This includes compensation for losses as a result of failure to perform property maintenance and other obligations. Damages for unpaid rent will include any arrearages for the time that has already passed.

Under California law, landlords are allowed to recover:

  • Unpaid rent that is already owed.
  • Difference amount from the rent of a new tenant going forward if it is less than the defaulted lease. This difference can only be collected for the remainder of the lease term.

It’s critical to understand that monetary damages are limited by the landlord’s duty to reduce damages. This duty states that a landlord is not allowed to let their rental property sit for a lease term if they could have found a new tenant.

Watch Out for Waivers

Your right to terminate a lease may be considered waived if your tenant can prove that you knew of the breach but acted as if the lease was still in effect. For instance, the tenant can argue that you have willingly accepted the breach if you continued to accept rent. This is constituted as a waiver of the breach.

Get a Trusted Real Estate Attorney on Your Side

The experienced attorneys at Peterson, Martin & Reynolds will assess various aspects of your commercial lease default to find the most effective legal strategy going forward. Our attorneys are dedicated to helping property owners that have been wronged by their tenants. To request your confidential consultation with us, call (415) 849-2564 or write to us online

What Constitutes a Breach of Fiduciary Duty in California?

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Fiduciary relationships work to ensure the highest degree of loyalty and care from one party to another. Breach of fiduciary duty can do more than violate this trust relationship – it may result in irrecoverable costs in a variety of forms.

What is a Fiduciary Relationship?

A fiduciary relationship has been defined within the California Civil Jury Instructions published in 2017 as “any relation existing between parties to a transaction wherein one of the parties is duty bound to act with the utmost good faith for the benefit of the other party.”

In essence, the fiduciary duty of a party to their beneficiary exists when the beneficiary places their complete confidence in the fiduciary’s integrity. The fiduciary is not allowed to work against the beneficiary’s interests or take advantage of them without consent or knowledge.

These are a few typical examples of individuals and organizations owing fiduciary duty:

  • Banks to their borrowers
  • Attorneys to their clients
  • Controlling shareholders to minority shareholders
  • Business partners
  • Insurer to insured
  • Corporations to their stockholders
  • Pension fund trustee to pensioner beneficiary
  • Joint venturers
  • Stockbroker to client
  • Spouse to spouse
  • Trustee to trust beneficiary
  • Trade unions to union members

Forms of Breach of Fiduciary Duty in California

A person agreeing to act as a fiduciary essentially promises to act in the best interests of the other party. Hence, a breach of fiduciary duty takes place when the fiduciary acts in a self-interested or self-serving manner. Typically, breaches of fiduciary duty take place due to deception or negligence on the fiduciary’s behalf.

These are a few common examples of a breach of fiduciary duty:

  • Acting in a manner beneficial to a competitor
  • Sharing an employer’s secrets
  • Mishandling for company funds or assets
  • Deliberately withholding important information from partners
  • Engaging in any conduct legally classified as self-dealing
  • Using the trust’s property for the fiduciary’s own benefit

Consequences of a Breach of Fiduciary Duty

It’s important to understand that a breach of fiduciary duty is not a criminal act in itself. But it can be tied to one. For instance, insider trading is not just a breach of fiduciary duty, but it is also a crime depending on the significance of the wrongdoing.

The fiduciary won’t just have to deal with the damages associated with their breach, but also the consequences of a criminal act in certain cases. This may include penalties and jail time. In California, a plaintiff can demand compensatory damages along with punitive damages.

Punitive damages are awarded in more exceptional cases. They are not meant to compensate the plaintiff, but to punish the defendant and send a message to society that this particular breach of fiduciary duty is unacceptable and will not be tolerated.

The difficulty lies in quantifying damages and actually proving that a breach exists. This is where a qualified civil litigation attorney can prove to be useful.

Elements of a Breach of Fiduciary Duty Claim

There are four primary elements that need to be demonstrated to successfully prove a breach of fiduciary duty. Plaintiffs can recover damages caused by a defendant by providing substantial evidence supporting the specific components.

Plaintiffs should be prepared to show that:

  • Fiduciary relationship existed and the principal was owed a duty by the fiduciary.
  • Fiduciary acted in a manner that breached or contradicted their expected duties.
  • Fiduciary’s actions caused the principal to suffer damages.
  • Damages incurred on the principal were a direct result of a breach of fiduciary duty.

According to California’s Code of Civil Procedure section 343, you have four years to file a breach of fiduciary duty claim. But this is not a universal statute of limitations.

Your claim may have grounds for constructive fraud, in which case the statute of limitations will be reduced to three years. This makes it crucial to contact an attorney to discuss your options and file a claim in a timely manner.

It’s important to set realistic expectations regarding the next steps whether you are a defendant or a plaintiff in a breach of fiduciary duty claim. A reputable business attorney in California will be able to explain the fine nuances of the way the law applies to your particular case. This includes reviewing arbitration agreements, options for litigation, and the possibility of settling out of court.

There may be multiple parties involved in your claim, which could make it complex. Filing a claim can be costly and may last for months. For this reason, it is in your best interests to act swiftly if you believe you were harmed by a breach of fiduciary duty.

Our Seasoned Civil Litigation Lawyers are Ready to Fight for You

The attorneys at Peterson, Martin & Reynolds have helped numerous clients attain fair compensation to cover the losses suffered through a breach of fiduciary duty. Our lawyers have extensive legal knowledge and experience successfully litigating fiduciary breach cases across a wide array of circumstances.

Schedule your comprehensive case review with our lawyers today. Call us at (415) 849-2564 or contact us online.

Understanding Quiet Title Action Lawsuits in California

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Uncertain property boundaries between neighbors, boundary disputes, unclear ownership of inherited property, and claims of adverse possession are some of the common reasons for filing quiet title actions in California. This type of lawsuit requires legal representation from an experienced real estate attorney for settling a dispute and establishing title to the property.

Quiet Title Lawsuits in California

The purpose of quieting title to a property is to establish clear ownership of the title against adverse claims or any interest in the real property as per Cal. Civ. Code § 760.020. Quiet title action represents a legal proceeding whereby an entity or person claims title to a portion or all of a specific real property. The Plaintiff asks the Court for a ruling that their title is superior to any other interest claimed by the Defendant.

It’s essential that the action is filed in the same county where the real property is located physically. The Court has the supreme power to make determinations on the title issues once you file the quiet title action.

It is important to understand that these lawsuits are particularly powerful. Hence, they involve stringent requirements as compared to other lawsuits in the real estate field. It’s also necessary to understand that quiet title actions are different from cancellation of instrument claims and claims to remove a cloud on the title.

Purpose of Filing a Quiet Title Action

Quiet title lawsuits are filed for targeting any adverse interests in a real estate property. The claim is appropriate for establishing an interest against other existing clouds on the title or adverse claims in real property ((Paterra v. Hansen (2021) 64 Cal.App.5th 507, 532.) All quiet title actions seek to sue unnamed defendants designated as persons claiming an interest in the concerned property.

If the Plaintiff is successful in their action, the court will establish their title, which will become binding on non-parties to the suit. Quiet title action judgments are good against the world in a manner of speaking (Nickell v. Matlock (2012) 206 Cal. App.4th 934, 944.)

These are a few typical reasons for filing a quiet title action:

  • Boundary disputes: These arise when adjoining property owners disagree over the location of a boundary line.
  • Errors on deed: This refers to clerical errors on a deed that requires resolving.
  • Easement on property: A Plaintiff may seek to establish the duties and rights regarding the easement on a real estate property.
  • Lienholder claims: The property may have claims by lienholders regarding unpaid property taxes or for an outstanding Deed of Trust that doesn’t appear to have been discharged.

Special Requirements for Bringing a Quiet Title Action in California

Quiet title actions have several unique requirements, which is why they are characterized as stringent. These lawsuits are commenced by filing a complaint with the court for quieting the title as per Code Civ. Proc. § 761.010(a). The complaint is required to satisfy certain components as mentioned in the California Code of Civil Procedure.

The complaint to quiet title in California should contain the following as per Code Civ. Proc. § 761.020:

  • Description of the issue property.
  • Title of the Plaintiff that requires determination.
  • Adverse claims to the title held by the Plaintiff.
  • Date as of which the quiet title determination is sought.
  • Prayer for determination of the title against adverse claims.

Quiet Title Judgement Cannot be Obtained by Default

There is a ban on judgment by default in a quiet title action. Normally, if the Defendant fails to appear or respond to a lawsuit in court, the Plaintiff can request for a default judgment. This judgment is generally binding if there are no problems with the process service.

Based on this, the unambiguous language of Code Civ. Proc. § 761.010 establishes that the court cannot enter a judgment by default and will in all cases require evidence of the Plaintiff’s title. The power of the quiet title judgment is the primary reason for this unusual restriction. Judgment on these actions becomes final and is good against the world.

Should You Consult with a Quiet Title Attorney?

The chief objective of a quiet title action is to obtain clear ownership of the property. It also helps in settling any flaws found during a property title search.

In relation to this, the process of filing a quiet title is not always straightforward or easy. It takes a skilled attorney specializing in real estate to examine the title, review search results, and take the necessary steps for obtaining a title insurance policy.

This will help in preventing possible clouds on the title. A seasoned attorney will know clearly what needs to be done in case of title defects. It’s wise to speak with an attorney regarding the claim since conflicts in property ownership routinely lead to litigation.

Our Reputable Quiet Title Co-Ownership and Partition Attorneys are Here to Give You the Right Legal Advice and Support

You don’t need to fight a quiet title battle on your own. The real estate attorneys at Peterson, Martin & Reynolds have vast experience in handling such lawsuits throughout California. When you sign up with us, our legal team will immediately move to take the necessary steps and help you obtain a clear title to your property.

To set up your initial consultation with our attorneys, call us at (415) 849-2564 or reach us online.

Mechanics Liens Process for Contractors and Subcontractors

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Firm handshakes can no longer be trusted by contractors and subcontractors to ensure they get paid. Proper use of a mechanics lien is one of the best ways to obtain a security interest in the owner’s property. An experienced California real estate attorney can help ensure you follow the statutory process for preparing, filing, and enforcing a mechanics lien.

Need for Mechanics Lien

Contractors and subcontractors can use mechanics liens to collect payment for their construction work and supplies. The lien allows for taking possession of the property on which the work was completed if the property owner fails in making the necessary payments.

Mechanics liens are typically filed against property owners when they fail to pay their contractors and subcontractors. Filing a mechanics lien should not be your first go-to option, however. You should try and obtain your payment in an amicable fashion.

Call the property owner. Send them reminder emails and notifications for the property. You should let them know that you fully intend on pursuing legal remedies to get your fair and due payment.

This will let a judge know that you tried your best to resolve the dispute in good faith before filing a suit. If the property owner is hell-bent on not paying you, it may be time to file a lawsuit for a breach of contract and other damages (quantum meruit) along with a mechanics lien.

Process for Filing a Mechanics Lien in California

You can file a mechanics lien in 6 easy steps. While these steps may seem straightforward, it’s recommended that you have a reputable law firm represent your interests. California law requires you to do the following for filing a mechanics lien:

Include the provision in your contract

Contractors are usually required to inform the property owner regarding the right to payment and filing of a mechanics lien. This language should be included in your services or materials contract. It will essentially protect your rights in case you are not paid and have to file a lien down the road.

Send direct notice to the property owner

You are required to send notice to the property owner directly within 45 days advising them of the right to file a lien. Contractors should also explain that the property owner has the authority to make direct payments to the subcontractors for materials or work. This is an important notice as it preserves your access to filing a mechanics lien.

Obtain owner information

Subcontractors may not have direct access to the property owner. They should demand the name and address of the property owner for which they are providing the materials and services. It’s best to make this demand in writing with the contractor.

Request payment

The mechanics lien cannot be filed right away. You should first ask the property owner for payment before using the lien option. The property owner should also be given the opportunity to pay. Send a nonpayment letter to the property owner reminding them of the dues.

File a Statement of Lien

You only get 120 days for filing the Statement of Lien. The timer starts from the day you completed the work and not when the due date for the payment was missed. You may end up waiving your right to claim a lien if you miss this deadline. The original Statement of Lien has to be filed with the county recorder. A copy of the same needs to be sent to the property owner using certified mail.

Legal action

You can take further legal action against the property owner. You get 365 days from the last day of work to file a complaint against the property owner

Your first step when considering filing a mechanics lien should be hiring an attorney. It’s best to work with an established law firm with the necessary experience.

Do You Have a Right to File a Lien?

You will need to determine whether you have the right to file a mechanics lien or not. Certain construction laws in California state the circumstances in which contractors and subcontractors can file a lien.

Just because the property owner did not pay you, doesn’t give you an automatic right to file a lien. On a related note, you can always lose the right to file a lien even if you had that right at the beginning of the project.

“Frivolous lien” refers to a lien when you did not have the right to file it. This can lead to an expensive legal mess. There is a lot of room for error in these situations since nothing is set in black or white. This makes it important for you to work with a qualified real estate business lawyer who understands the laws and your needs.

Speak With an Experienced Real Estate Attorney in California Today

It can be difficult and confusing to figure out whether you have lien rights or not. The real estate lawyers at Peterson, Martin & Reynolds can help you understand all available legal options to recover the money you are owed from the property owner.

To schedule your initial consultation with our office, call us today at (415) 849-2564 or fill out our online contact form.

Understanding And Resolving Easement Disputes in California

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According to a recent survey, 17% of real estate issues were found to be boundary disputes between neighbors. This occurs when residents are uncertain about where their property begins and ends.

Unfortunately, easement disputes can quickly become ugly, lengthy, and expensive. An experienced real estate attorney can help you with skilled legal guidance and direction if you are involved in a boundary dispute with your neighbor.

Overview of Easement Issues in California

An easement refers to a situation in which an entity or individual has the legal right to use or occupy the land of another person for a particular purpose. However, the landowner retains the title. Such property is usually termed “servient estate.” The property owner can keep every other person from using the land except the easement holder.

Types of Easements in California

There are four general types of easements that apply to properties in California. These are:

Easement by Express Grant

Express easements are created when the easement is granted by the landowner. This allows another entity or person to use the land as specified or directed.

An express easement can be created using a contract, grant, deed, or any other form of written document. It’s recommended that you work with a trusted attorney to draft the express easement document. This will help prevent common disputes from cropping up at a later date.

Easement by Implication

The second type of easement is by implication. This is created when it becomes certified by law that there was a previous easement between the two parties (although implied). It’s necessary for the claimant of the implied easement to bring proof that they had the landlord’s word or were already able to use the servient estate for a defined purpose.

Easement by Necessity

Easement by necessity happens when there is no other option but to use the land for the intended purpose. It becomes absolutely necessary to allow the use of land for the specified purpose in easement by necessity. This happens when there may not be any possible alternative for accessing the other person’s property. For instance, a landlocked party will need to use their neighbor’s property for accessing their own property.

Easement by Prescription

A prescriptive easement is generally granted when an individual continues using a part of another person’s land for a certain time period. Easement by prescription can be granted even if the landowner did not specifically permit the use of the land.

Common Examples of Easement Disputes in California

Easement disputes between neighbors are a common issue in California as previously stated. These are a few common easement and boundary disputes between neighbors:

  • Trespassing: Landowners have an express right to keep their property safe from unwanted intruders and strangers. A neighbor driving through another’s land every day can be considered trespassing if it is without permission.
  • Interference: Interference happens when the actions of a person hinder or affect the purpose for which the property easement was granted in the first place. The person interfering with the use of easement can be held responsible for their actions.
  • Zoning: Zoning and land-use regulations, which prevent a landowner from using the property can be the cause for an easement dispute between the landowner and the city.

Easement and boundary disputes should not be taken lightly. You should speak with an attorney as soon as possible if you are involved in one. In fact, it is a good idea to consult with an attorney even before you formally discuss the issue with your neighbor.

Your attorney will be able to help direct the conversation in the right direction while maintaining your best interests. They may also outline the available legal actions at your disposal in order to obtain a favorable outcome.

Resolving an Easement Dispute

Easement disputes frequently turn into frustrating and lengthy arguments. But it doesn’t always have to be that way. There are a few possible ways of resolving a dispute if you are a property owner who is frustrated by an easement.

  • Try and resolve the disagreement mutually by opening a discussion with your neighbor. This approach usually works with neighbors that are friendly, reasonably minded, and community-driven.
  • Try to enter into a contract or agreement with the easement holder for the purpose of putting an end to the easement entirely.
  • Purchase the neighbor’s property if you have the means and your neighbor agrees.
  • Send a demand letter to the easement holder or neighbor. Note: it is best to have your letter drafted or at the very least reviewed by an experienced attorney.
  • Use the threat of legal action as leverage to negotiate with the easement holder or neighbor. Using a document that is drafted by a well-established law firm usually works well with this strategy.
  • Speak with a dedicated attorney about legal remedies that are available for limiting or terminating the easement.
  • If other more amicable measures have been exhausted, file a lawsuit against the easement holder to recover monetary damages if they improperly used the easement and caused you to sustain compensable losses.

Consult With an Experienced Real Estate Attorney in California

The experienced team of real estate attorneys at Peterson, Martin & Reynolds is committed to offering comprehensive representation with regard to easement disputes and other types of boundary dispute issues. We encourage you to set up a case evaluation by calling us at (415) 849-2564 or reaching out to us online.

 

Second District Court of Appeal Holds that Easement by Necessity Need Not Be over Previously Established Route, or the Most Accessible One

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By M. Henry Walker

This case involves the appeal of a trial court’s judgment granting an equitable easement over rural property in Ventura County. Plaintiff Hinrichs originally owned two large parcels which he inherited from his mother. He grew up in a home located on the southern parcel but hadn’t lived there since moving to Alaska in the 1980s. He sold the southern parcel to a third party based on the belief that he still had access to the only public road servicing the area via an historic trail which first appeared on a federal survey map in 1868 and which traversed several neighboring parcels. He was wrong in this regard; the owners of the neighboring parcels denied him access over the historic trail meaning his northern parcel was actually landlocked.

Hinrichs sued several neighbors, claiming he had an easement which was appurtenant to the original land patent, that he had acquired a prescriptive easement, and that he was entitled to an equitable easement by necessity. The trial court rejected the first two theories but entered judgment in favor of Hinrichs on the third, creating an equitable easement by necessity. The location of the created easement, however, was not over the historical trail area previously used for ingress and egress but rather over a new indirect route which was less accessible due to the terrain. While portions of the newly created easement had existing driveways, in order for Hinrichs to use the judicially created easement he would be required to grade two new roadways to connect to the existing portions. The trial court applied the “balancing of hardships” test and determined this to be the best location because this location would only minimally interfere with the servient parcels.

Hinrichs appealed, arguing the trial court erred in denying him an easement over the historic trail. The other parties appealed as well, claiming among other things that the trial court erred in creating a new easement where none had ever existed. The appellate court focused on the issue of whether a court can create an equitable easement by necessity where the party claiming the easement has made no prior use of the easement. On the latter issue, the appellate court affirmed the trial court’s judgment, holding that “the court may grant an equitable easement without there being a preexisting use by the landowner seeking the easement.” The appellate court reasoned that despite the holdings of several cases which recognize the imposition of an easement by necessity in the case of a “long-standing encroachment,” such an encroachment is not an absolute requirement for an equitable easement. Moreover, the court found no evidence that Hinrichs was negligent in creating the landlocked parcel because he had a reasonable belief that he had a right of way over the trail.

This residential real estate case serves as a reminder that while the law recognizes a strong interest in preventing land-locked parcels, a trial court sitting in equity must balance the rights of all parties rather than focus solely on the rights of the party claiming the equitable easement. In other words, Hinrichs got his easement but can’t be heard to complain that the location was not over the best access route. Perhaps that’s why it’s called an easement by necessity rather than an easement by convenience.

Hinrichs v. Melton (2017) 17 C.D.O.S. 4217.