Sat, February 20th, 2010
A Morsel of Housing Help for California… And an Idea
The Feds finally acknowledged, somewhat, that the housing problem in this country goes much deeper than banks and insurers, and threw a bone this week toward homeowners in the hardest-hit states, including California. (There are five states designated to receive funds.)
Time will tell exactly how much California receives from the allocated funds, or in what manner the funds can be used as approved by the feds. The amount of TARP funds allocated to the homeowners (and perhaps would-be homeowners as well)? $1.5 billion. Total. Not $1.5 billion per desperate state. $1.5 billion for everyone, including our state, which could swallow that paltry amount in minutes with its needs.
There clearly is not enough money allocated in this proposed program to truly repair the loss of equity many homeowners have suffered in their property in relation to their loans on the property. Perhaps some assistance to the banks in approving short sales? Oh, I forgot, they already subsidize the banks by compensating many of them for losses on property.
I would suggest attempting to use funds to draw down principals on loans for homeowners in a short refinance (principal reduction). If this works on a small scale, then a larger version, perhaps with real money, could be implemented next year. Just an idea.
Yes, the Obama camp acknowledged the problem. Just not that it’s a big problem.
Posted by Nick Yonano at 05:52
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Labels: Mortgage Default, foreclosures, housing, housing market, property value, real estate, short sale
Wed, June 10th, 2009
The Parties to a Partition; Trustees Included.
The headline here is mostly true. Meaning, trustees are and should be included as parties where the trust is an owner or has some beneficial interest in the subject property. There is a statute in California law, Code of Civil Procedure Section 874.240, which clearly states that the trustee of an express trust (not an implied or constructive trust) can be made a party defendant to a partition action.
The rule, California Code of Civil Procedure Section 874.210, is that any ascertainable person with any type of interest or claim, even if it is a contingent or future interest, must be named in the lawsuit in order to be bound by it. This includes an express trust.
What if there are claimants that the plaintiff does not know about when he or she files the partition action? That’s o.k., as long as the complaint contains certain language which allows the plaintiff to amend before judgment to name these persons at that time. Partition actions often need some ”cleaning up” before a trial when it comes to naming defendants, because certain types of property, especially commercial land, often involve several different owners or competing interests.
Posted by Nick Yonano at 05:23
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Labels: land, partition, property value, real estate, title dispute
Tue, June 9th, 2009
A Partition in Kind– A Court’s Kindness?
It’s not what it sounds like, though some property owners believe a partition in kind is much more “kind” than a partition by sale. A partition in kind is essentially a court-order to divide the property, instead of outright selling it and dividing proceeds. This is favored by courts when possible because, unlike partitions by sale, the property will stay with one or more of its current owners who may want to keep it.
There is a big decision handed down many years ago involving two branches of a farming family in the southern San Joaquin Valley, where 4,700 acres of land (and water rights to a water ditch) were involved, and the two sides of the family just didn’t get along. The land was known as the Ward Ranch.
One side sought the partition by sale. The other side wanted it divided. The appellate court upheld a lower court’s ruling that the property could be divided in-kind, meaning divided among the family members. When possible, this will be the direction of every court. But it has to pass the fairness test, meaning this route would be fair and equitable for all parties.
Posted by Nick Yonano at 03:42
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Labels: land, partition, property value, real estate, title dispute
Thu, June 4th, 2009
A Partition in California: Experts in Real Estate are Critical
Many property owners, and yes, this may include owners of personal property as well, resort to the partition process set forth in the Code of Civil Procedure, as a means to part ways with their ownership of property in California. In a partition, one (or more) holder of interest in real estate files an action to start the process. He or she must also file what is called a “lis pendens”, which is a notice to the public that a potential case affecting the property, is in court. This lis pendens is recorded at the county recorder’s office, and puts potential buyers on notice that what they may be purchasing has certain claims involving it.
Once an answer to that complaint is filed, by all those served and named in the lawsuit, the parties will proceed with the process of partitioning the property. If it can be divided, a partition may be handled in that manner, but normally that is not the case when there is a single-family residence involved. A partition in kind normally applies where there are divisible lots owned by multiple persons/entities. If a sale is necessary, one party, often a defendant, will plead to the court to purchase the property. If that’s the case, an appraiser and often a real estate broker or three is brought in, to help determine a figure for the purchase. When a number is arrived at by the experts, if the parties agree, then the sale can take place without a court order. If not, then the battle of experts may begin to take place. Each party may want his/her own expert to testify to the court about the value of the property.
At some point, the property is sold, and in most cases, to a third party on the open market. A partition action usually will include an action for an accounting, where the owners may contend that the other person contributed less than he/she did, or withdrew in profits more than he/she did. This may mean that accountants become involved as well. So the experts have their say in not only how the price gets determined, but in how the money is divided as well.
I make it sound more complicated than it really is. Actually, since there is not too much fact-finding in your typical partition case, there isn’t much of a need for depositions and extensive discovery. The cost can be reduced if that is the case.
Yes, not the ideal way to part with property, but often a necessary solution.
Posted by Nick Yonano at 08:45
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Labels: land, lis pendens, partition, property value, real estate, title dispute
Sat, May 2nd, 2009
Constructive Trust for Profits from Property
In my series of posts about constructive trusts, I thought it would be a good idea to focus on the profits of a trust. One case that I can recall from earlier days of practice involves the theft of jewelry molds by a partner in a jewelry business. Those molds ended up making some money for the embezzling partner after the breakup, but they belonged, in part or in full, to the innocent partner. There was a lawsuit, and the court found on appeal that the profits that resulted from the use of the mold, though not made by the efforts of the innocent partner, belonged to the innocent partner and not the embezzler.
The theory is this: a constructive trust attaches to not only the thing being held by a person as a trustee for another, but the profits realized from that thing.
When I (they) say “that thing”, remember we’re also talking about real property. If real estate produces a profit, not just in general appreciation, but in other ways, such as mineral or oil profits, in most cases those profits belong to the person who truly owns the property. The idea here is to avoid “unjust enrichment” for the trustee, so that he/she cannot be able to profit, in any way, from his/her actions.
Posted by Nick Yonano at 10:46
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Labels: constructive trust, fraud, property value, real estate
Thu, February 26th, 2009
Waste by A Third Party Tortfeasor-A Beneficiary’s Rights
My last post involved “waste” by a landowner that damages a lender’s interest in the property. The question has come up, what if someone OTHER than the landowner causes the damage, can the lender or beneficiary bring an action for waste against that person? Yes and no. No, because it’s not technically considered “waste” since the owner did not do it. But yes because the beneficiary can still sue.
What’s important for a beneficiary to remember is that they can sue the third party without having to foreclose on the property (but they can also do them both at once), and this type of suit does not violate the one-form-of-action rule, which as you may know, limits the ability of a beneficiary in bringing a suit against the landowner.
So yes it is an injury that can be redressed by a lender. But it’s not technically “waste”.
Posted by Nick Yonano at 10:57
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Labels: land, property value
Tue, February 24th, 2009
Your Deed of Trust Makes You the Protector of Your Property
Of course, you’re going to protect your home and your property. It’s where you live, where you sleep, hug your kids. That’s reason enough. But there’s one more reason, and this one you signed up for in writing. That is, if your property is security for a loan you took to buy it.
It’s aptly called “waste”, which is the, yes, legal term, for doing something to damage your lender’s investment in your property. The classic cases center around things such as unreasonably removing timber from the property, or tearing up the land for its minerals. However, there are more subtle versions of waste as well.
The language in the deed of trust usually goes something like this: “keep property in good condition and repair”. What does this mean? It could mean whatever a judge thinks it means. Most likely, it simply holds that the landowner must protect the property from damage, and repair the property if there is damage.
Did you know that failure to make repairs to your property after a fire or an earthquake, or some disaster like that, could be waste? And in today’s economy, be aware of this one: failure to make property insurance payments can constitute waste. It’s always a good thing to make sure your insurance agent is covering every possible loss or damage that could occur at your home or property.
In Turlock, one agent I recommend for this is Jeremy Benjamin, at Winton Ireland Insurance, a reputable firm in the Central Valley. I also recommend a couple of Folsom/El Dorado Hills agents. One is Susan Horn-Deubel.
Posted by Nick Yonano at 11:56
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Labels: el dorado hills, folsom, land, property value, real estate
Tue, January 6th, 2009
A New Year’s Resolution: Protect Your Property Rights
In addition to the usual resolutions which we all grab on to at this time of year, let me add one more. Not that losing weight or tossing those cigarettes isn’t important, but this one is, too. Are you doing everything you can to protect your property rights? You think you are, but there is more to this than you may think. Throughout the year, I will be adding posts on what a property owner can do to protect his/her rights.
The first is making sure the use of the property is not being adversely possessed. Five years of continuous, open, and hostile use of another person’s property can give one an ownership, or at least an ownership interest, of that property. I see this most often in the misunderstood boundary line setting. Property owner A’s fence is two feet off his/her property and is actually lying on Property Owner B’s property. Been there many years. Most courts would hold that Property Owner A owns that two feet of land now, because he/she adversely possessed the property as required by the law, for five years. Some courts also require A to pay property taxes as well in order to acquire title. I’ll write more about this concept, and similar concepts as well, in upcoming posts.
Posted by Nick Yonano at 08:35
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Labels: adverse possession, land, property value, real estate, title dispute
Wed, November 19th, 2008
Protecting Your Home, One Community at a Time
I like hearing about new community watches. Not because we need more security. Which we do. But because we need more community involvement in general. Families and individuals just getting to know each other and looking out for each other in all phases of life, not just in the fight against crime. Put it this way, a community that sets up a neighborhood watch is that much closer to being a community that people will feel good about living in. This came across a local Folsom real estate blog, about the Empire Ranch community and its new neighborhood watch. This is what homebuyers and their real estate agents love to see.
Posted by Nick Yonano at 04:50
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Labels: property value, real estate, real estate agent
Wed, October 22nd, 2008
Family Real Estate Holdings Aren’t Always Cozy
We just closed an escrow this week on a set of parcels owned in part by members of the same family. By we, I mean, my clients, one-half of the family, and the other one-half of the family. Nobody was getting along in how the business that was located on one of the properties, was being handled. So they went different directions. In doing so, they amicably, and I mean that loosely, agreed to split up their holdings.
The alternative would have been messy, distracting, and expensive litigation. No one needed that to happen. A second alternative would be for each half to lease the property they want from the other half. But that meant complicated lease agreements, continuing payments, or lack thereof, from one side to the other, and yes, eventually litigation if things didn’t work out.
So what they did was exchange parcels with each other, and divide up the business according to its value. It wasn’t a perfect solution, but it was better than the alternatives I’ve already mentioned here.
Most family-held real estate never gets to the point where the owners have to fight about it. But some holdings do. In that case, find a lawyer who has a cool head. And most important, hope and pray that your relatives do the same.
Posted by Nick Yonano at 10:33
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Labels: land, property value, real estate, title dispute
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