1997: Recent Real Estate Cases

This Article is designed to be of general interest. The specific techniques and information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser.

See 1997 California Statutes

The following are some of the most interesting new Real Estate Legal Cases of interest as we start 1997.

# references are to cases listed at end of Article

Attorney's fees are awarded to the "prevailing party" in some lawsuits. What happens if you are sued the plaintiff later drops his suit? You are the prevailing party, possibly entitled to an award of fees and costs. NOTE: THIS CASE IS UNDER APPEAL TO CALIFORNIA SUPREME COURT. 1

Landlord-Tenant:
You settle an eviction and then the tenant sues??? Unless you get a proper release, the tenant has not released his right to sue for breach of habitability or anything else. The right Release will protect you. 2

Landlord cannot discriminate against unmarried couple, based on Owner's religious beliefs. 3

Local law limiting number of tenants per bedroom unconstitutional violation of equal protection: it would be OK if it applied to owner-occupants also, not merely tenants. 4

Landlord may reasonably limit the number of occupants per bedroom. 5

Landlord Liability:
For injury on neighbor's land which Landlord knew was used as a shortcut by his tenants. 6
For injury caused by criminal activity at shopping center where Landlord took no preventative action after knowledge of prior criminal activity. 7
Commercial property owner duty to inspect for defects at lease and renewal time. 8

Landlord No Liability:
For tenant mugged by gang on nearby public street. 9
For tenant gang-raped in garage with defective gate where relationship between gate and rape not proven. 10

Condo:
Non-resident owner can be prohibited from using facilities. 11
No duty of Association to disclose construction defects/pending litigation. [Association cannot lie if asked, but does not have to volunteer information, SO ASK!] 12

Taxes:
1034:
No good cause extension allowed for 24 month rollover period. 13
For more information, see Home Owner's Tax Manual

1031:
No good cause extension allowed for 180 day acquisition period. 14
180 day acquisition period ends when Taxpayer files his 1040 or on April 15, unless an extension is filed! GET AN EXTENSION IF YOU SOLD IN THE LAST QUARTER OF THE YEAR!! 15
For more information, see 1031

Property Taxes:
Proposition 13 allows re-assessment on transfer, unless exemption exists AND forms are timely filed. Time period starts with death of Grantor of trust (i.e. date Trust became irrevocable). 16

Appraisers:
Lender who makes full credit bid cannot recover against appraiser, since they bid the whole loan balance and have no damage. 17
Appraiser is liable to Lender (when Lender was not known by appraiser) if Lender relied on appraisal prepared by appraiser hired by Homeowner. 18

Insurance:
Seller's homeowners policy does not cover failure to disclose defects lawsuit. 19
Seller's homeowners policy may cover encroachment. ("May cover" means insurance carrier must defend lawsuit.) 20

Lenders:
Pre-Payment Penalty allowed for Installment Sale Income Tax Liability of Seller. 21
Incorrect demand waives security for unpaid balance due; balance is still owed, but not secured by real estate. 22

Arbitration:
Award of sanctions is allowed. 23

Title Insurance:
Company has no liability for errors in preliminary report where Buyer does not buy the policy. 24

Foreclosure:
Anti-Shark rule requires proper notice of rescission right. Damages against Realtor who did not use the Foreclosure Purchase Form or otherwise give notice of Borrower's right. 25
Bankruptcy of Junior Lender halts foreclosure by senior lender. 26
Sequential Bankruptcies by separate owners can be prevented. 27

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