Real Estate Law

When entering a real estate sales transaction, the parties to the sale enter a contract for the sale of the real estate. In California, real estate sales contracts are typically entered on “form” contracts. In the residential setting, the California Association of Realtors (“CAR”) form is most commonly utilized. In the commercial setting, an AIR Commercial Real Estate Association form is most commonly utilized.

When people transact business, particularly when the stakes are as high as they are in a real estate transaction, disputes sometimes arise. Some disputes happen prior to the sale closing, and some disputes occur after the sale closes.

Some common types of disputes include a claim by a buyer after the close of escrow that the seller knowingly failed to disclose defects regarding the property or made material misrepresentations regarding the property; and prior to the close of escrow a common dispute that arises relates to impediments to get escrow closed.

In dealing with these disputes in California, the parties need to look to the written real estate sales contract to understand how the dispute needs to be dealt with.

In the residential setting, the CAR form requires the parties to the contract, prior to commencing any legal proceeding, to engage in a mediation, which is a process that is designed to get the dispute settled without the necessity and cost of having to litigate the dispute. For a prior article on mediating real estate disputes, see this article about Real Estate Mediation in California.

And in fact, the CAR form not only requires that a dispute first gets mediated by the parties, but also states that if one of the parties refuses to participate in a mediation process or agree to participate in a mediation process, then they are waiving their right to recover any attorney’s fees if any litigation ensues.

Both commercial and residential form real estate contracts contain arbitration clauses. If the arbitration clause is initialed by both parties, then any dispute as between the parties to that contract, should be litigated through an arbitration.

An arbitration is a private trial which is often quicker than utilizing a lawsuit and the court system. If the arbitration clause is not initialed by the parties, then the parties, if they are going to commence legal proceedings, would do so by filing a lawsuit.

Both the CAR forms and the AIR forms contain an attorney’s fees clause, which has the effect that if a dispute is fully litigated, the prevailing or winning party to that dispute may be entitled to recovery of some or all of their attorney’s fees. The attorney’s fees clause could be very very powerful, as it can minimize the risk of frivolous or baseless claims.

I regularly represent clients in the East Bay, in Oakland, California, and in Walnut Creek, California, in real estate contract disputes. If you have questions, or need representation by a California real estate attorney involving a dispute regarding a real estate transaction, please feel free to contact me to discuss your case or to arrange for a consultation at (510) 465-0025 or (925) 708-3306.

A mechanic’s lien is a lien that contractors, sub-contractors, laborers, material suppliers, and design professionals may record against real estate as a first step in enforcing the property owner’s obligation to pay for those services or materials. In California, once a mechanic’s lien is recorded against the property, the lienor can then commence a legal action to foreclose on the property. If a mechanic’s lien has been recorded against your property, it is critical that you deal with it, and that you deal with it quickly. Failing to deal with it in a timely manner risks becoming a party to a lawsuit and ultimately risks losing the property at a foreclosure sale.

So you ask what should I do if a mechanic’s lien has been recorded against my property? The first question that needs to be asked is whether or not the money is rightfully owed. If the money is rightfully owed, the best course is to resolve the dispute with the lienor, by either paying the amount owed, or entering an agreement that provides for the payment of monies over time in exchange for a release of the mechanic’s lien.

Sometimes, however, even though the lienor has placed a mechanic’s lien against the property, the amounts the lienor contends are owed are not owed or there is a dispute, typically a dispute relating to the manner in which the services were provided. If there is a dispute or the monies contended by the lienor to be owed are not owed, the owner of the property has a variety of legal recourses available to them.

First, you can make an attempt to resolve the dispute and cause the lienor to release the lien.

The property owner could also purchase a bond which releases the lien, which replaces the bond as security for the obligation in place of the property.

The owner can also file a legal action against the lienor to prevent the lienor from foreclosing on the property, on the basis that the mechanic’s lien is invalid.

Once the mechanic’s lien has been recorded, the lienor has a short period of time to commence legal action to foreclose on the mechanic’s lien. As of the date of the writing of this article, the amount of time under California law to file a lawsuit to foreclose on the mechanics lien is generally within 90 days of the recording of the lien. If the lienor fails to timely commence the action to foreclose on the mechanic’s lien, there is a quick, relatively inexpensive court procedure, that you can file to obtain a court order releasing the lien. This procedure is started with the filing of a Petition to Release Lien.

Similarly, if the lienor has commenced the action to foreclose the mechanic’s lien, but the lien is legally invalid, the property owner can file a Motion to Release or Expunge the Mechanic’s Lien in that Action.

There are a variety of options available to the owner depending upon factors including whether or not the amounts owed the lienor are in fact owed, where you are in the process, and whether or not the lien is valid. The one factor that is consistent regardless of the course you take is that timing is very critical for both the lienor as well as the property owner.

I regularly represent clients in the East Bay, California, Oakland, California, Walnut Creek, California and throughout the Bay Area, relating to many different real estate matters including mechanic’s liens and stop payment notices. If you have questions, or need representation by a California real estate attorney to enforce a mechanic’s lien, or to challenge a mechanic’s lien, please feel free to contact me to discuss your case or to arrange for a consultation at (510)465-0025 or (925)708-3306.

 

In California, a Quiet Title Action is typically used as an action by an owner of real property to confirm their title to the property, and at times, to refute another person’s claims to title to or liens against the property.

Typically you see quiet title actions when one party wants to confirm their title to the property over title that may be asserted by another person. But those title disputes are not the only instances where quiet title actions can be useful. In addition to confirming your title to the property, a quiet title action can also be used to confirm liens against the property, to confirm the priority of liens against the property, or to eliminate clouds on title.

Clouds on title can include liens that do not belong there, liens for loans that have been paid off but the lien remains, easements that have been terminated, just to name a few.

Ultimately a plaintiff’s objective in a quiet title action is to make his or her title to the property marketable, so there will be no claims or liens on or against the title that will interfere with their ability to sell the property or to borrow against the property.

I regularly represent clients in Oakland, California, Walnut Creek California, and the East Bay in quiet title actions. If you have questions, or need representation by a California real estate attorney involving quiet title claims, title disputes, clouds on title, or establishing marketable title to property, please feel free to contact me to discuss your case or to arrange for a consultation at (510) 465-0025 or (925) 708-3306.

In California a lis pendens is created when a Plaintiff in a lawsuit records a Notice of Pendency of Action against a Defendant’s real property. The recording of the lis pendens causes a lien to be placed against the property and generally prevents the owner of the property from selling or encumbering (borrowing against) the property until the lis pendens is terminated.

Not all lis pendens’, however, are necessarily proper or authorized. Sometimes a lis pendens is intended by a Plaintiff to put pressure on a Defendant to give money to the Plaintiff, but the Plaintiff was not authorized to record the lis pendens. Under these circumstances, there is a procedure in California to have the lis pendens removed. That procedure is referred to as a Motion to Expunge Lis Pendens. A Motion to Expunge Lis Pendens is an application to the Court in the lawsuit that the Plaintiff has filed to request that the Court force the lis pendens to be removed from the Defendant’s title on the property. Some situations in California in which a Defendant can successfully have a lis pendens expunged include when the subject lawsuit does not involve a real property claim, or when it is more likely than not that the Plaintiff will lose the lawsuit.

The recording of the lis pendens can be a very powerful tool for a Plaintiff. The recording of a lis pendens places a cloud on the Defendant’s title to the property and holds the property up until the lawsuit is resolved, and sometimes even longer. Thus, the recording of a lis pendens against the Defendant’s property can have a harsh or debilitating impact on the Defendant’s property. Therefore, the Motion to Expunge a Lis Pendens can be a very powerful tool for a Defendant whose property has been wrongfully hit with a lis pendens.

I regularly represent clients in real property lawsuits involving the recording of lis pendens as well as the expunging of lis pendens. If you have questions, or need representation by a California real estate lawyer in an action involving a real property claim or a lis pendens or the expungement of a lis pendens, please feel free to contact me to discuss your case or to arrange for a consultation at (510) 465-0025.

 

Back in the day when my father practiced law, which was quite some time ago, if a dispute between parties escalated to the point of a lawsuit, most cases proceeded to trial (a lot quicker than they do now), and the case was resolved by the court after making a decision at the conclusion of trial.

Today, however, with the escalated costs of litigation including attorney’s fees, expert witness fees, and other litigation-related costs, as well as the large number of cases that the courts have to manage, the California courts (and the parties) have turned to alternative dispute resolution (ADR) to dispose of most cases. ADR methods can minimize the costs and uncertainty of litigation, and it relieves the court’s large case load by resolving the cases outside of court.

ADR has risen into popularity in the last 20 years or so as a very good alternative in most cases to fully litigating the case and proceeding to trial. Litigation and trials are very, very expensive and very time consuming. In California, two forms of ADR, arbitration and mediation, have nearly replaced court trials in dealing with lawsuits. Arbitration is essentially a private trial, and will be addressed in a separate article. Mediation is a process where the parties and their attorneys all get together with a neutral third party, usually a retired judge or an attorney, and collectively attempt to resolve or settle the dispute.

But why mediate you ask. As stated earlier, the cost of litigation can be very expensive, even in many of the simplest of cases. Additionally, the traditional litigation process can be very time consuming and last a very lengthy period. Finally, utilizing the trial process leaves a great deal to chance.

Juries are unpredictable and judges can make mistakes and often do. Consequently, the litigation process is largely outside of the parties’ control and the outcome is very uncertain. Mediation enables the parties to maintain control of the outcome. A mediation, if successful, results in a settlement that the parties have agreed to. Consequently, the parties control the outcome. The alternative of going to trial is to leave the outcome of the case to a judge or jury after spending large amounts of money in getting to that point. Mediations, particularly mediations that are completed early in the case, minimize the cost to the parties, and leaves control of the outcome of the case within the hands of the parties. For all of these reasons, mediation, with the right mediator and attorneys, can be a very effective tool in resolving civil lawsuits. Mediations can even be useful prior to the commencement of a lawsuit and as discussed in my article, Mediating Real Estate Contract Disputes, certain contracts require mediations to be completed prior to the commencement of the legal action or lawsuit.

I have regularly represented clients at mediations for many years in Walnut Creek, Oakland, the East Bay, and throughout the Bay Area, California. If you have questions or need assistance in mediating your dispute by an experienced and effective California attorney, please feel free to contact me to discuss your case or to arrange for a consultation. I can be reached at (510) 465-0025.