Real Estate & Construction

By:  Kevin J. Parker https://www.swlaw.com/people/kevin_parker In re Brace, 470 P.3d 15 (Cal. 2020), a California married couple acquired real property with community funds, and took title as “husband and wife as joint tenants.” When the husband filed a chapter 7 petition in bankruptcy, the bankruptcy trustee sought to include the property in the debtor’s estate. The Bankruptcy Code provides that community property is part of the bankruptcy estate.  The bankruptcy court found that the couple acquired the property with community assets and thus the property was presumptively community property. The couple objected and appealed to the Ninth Circuit, which certified…
Earlier this year, the Colorado Court of Appeals issued an opinion addressing at length “whether the requirement that the use be ‘adverse’ in the adverse possession context is coextensive with adverse use in the prescriptive easement context.”  See Woodbridge Condo. Ass’n, Inc. v. Lo Viento Blanco, LLC, 2020 COA 34 (Woodbridge II), ¶ 2, cert. granted, No. 20SC292, 2020 WL 5405376 (Colo. Sept. 8, 2020).  As detailed below, the Woodbridge II court concluded that the meanings of “adverse” in these two contexts are not coextensive—while “hostility” in the adverse possession context requires a claim of exclusive ownership of the property,…
By: Lyndsey Torp A recently issued opinion by the Court of Appeal, Fifth Appellate District tells a cautionary tale regarding a lender’s failure to name a junior lienholder in its initial judicial foreclosure action. In Cathleen Robin v. Al Crowell, — Cal.Rptr.3d —-, 2020 WL 5951506, plaintiffs sued defendant, a junior lienholder, for quiet title, having failed to name him in the initial judicial foreclosure action. Defendant raised the statute of limitations defense, but the trial court found in favor of plaintiffs. The court of appeal reversed, holding that the 60-year statute of limitations which the trial court applied only…
By Colton Addy The Center for Disease Control and Prevention (the “CDC”) and the Department of Health and Human Services (the “HHS”) has issued an order to temporarily halt a landlord’s right to evict certain residential tenants to prevent the further spread of COVID-19 (the “CDC Order”). The CDC Order is effective through December 31, 2020. Applicability of the CDC Order. The CDC Order does not apply in jurisdictions that have a moratorium on residential evictions in effect that provides the same or greater level of protection than the CDC Order, and the CDC Order permits local jurisdictions to continue…
By:  David Rao and Lyndsey Torp The California Judicial Council’s emergency rules staying evictions and judicial foreclosures are coming to an end. On March 27, 2020, the Governor of California issued executive order N-38-20, giving the Judicial Council emergency authority to act in response to the COVID-19 pandemic. On April 6, 2020, the Judicial Council of California voted to approve temporary emergency rules of court. Rule 1 prohibited the issuance of a summons, or the entering of a default, in an eviction action for both residential and commercial properties except as necessary to protect public health and safety. Rule 1…
Contractors can enjoy the PDA’s protections only if they are aware of their rights and obligations, and they comply with the requirements that the PDA imposes at each step of the process. Dwelling Action The PDA applies to all “dwelling actions” – any action “involving a construction defect brought by a purchaser against the seller of a dwelling arising out of or related to the design, construction, condition or sale of the dwelling.” While it uses the terms “purchaser” and “seller” (see definitions at the end of this article), the PDA is not limited to new home construction and sales;…
Contractors can enjoy the PDA’s protections only if they are aware of their rights and obligations, and they comply with the requirements that the PDA imposes at each step of the process. Dwelling Action The PDA applies to all “dwelling actions” – any action “involving a construction defect brought by a purchaser against the seller of a dwelling arising out of or related to the design, construction, condition or sale of the dwelling.” While it uses the terms “purchaser” and “seller” (see definitions at the bottom of this page), the PDA is not limited to new home construction and sales;…
Even before the Coronavirus/COVID-19 pandemic, construction projects involved significant risks for owners, contractors, subcontractors, and suppliers. Untold changes in circumstances related to the prices and availability of labor and materials, hidden conditions, and acts or events within or outside the parties’ control have the potential to turn a lucrative project into one that leads to ruin.  Accordingly, one of the primary functions of construction contracts is to allocate these risks so it is clear who will pay for increased costs if something unexpected happens. Now that we are in the midst of the pandemic and all of the disruptions that…
By:  Kevin J. Parker In a recent Arizona Court of Appeals case, Ibarra v. Gastelum, 2020 WL 4218020 (7/23/20), the Court of Appeals addressed the question whether – in a tenant’s personal injury claim against the landlord – a landlord’s violation of the Arizona Landlord-Tenant Act constituted negligence per se. The tenant alleged he was injured by stubbing his toe on a crack in the floor. The tenant alleged that he had made repeated demands that the landlord repair the crack. The statute required the landlord to make all repairs and do whatever is necessary to put and keep the…
By: Kevin J. Parker In a recent Arizona Court of Appeals case, CK Revocable Trust v. My Home Group Real Estate LLC, 2020 WL 4306183 (7/28/2020), the Court of Appeals addressed the distinction between “substantive” and “technical” statutory requirements for real estate broker commission agreements. The Court explained that failure to comply with a substantive requirement would preclude the broker from recovering a commission, but failure to comply with a technical requirement would not. As examples of such substantive requirements, the Court identified the statutory requirement that the broker be licensed at the time the claim for commission arose, and the…
Arizona’s Mechanics’ and Materialmen’s Lien laws are a powerful tool available to contractors, subcontractors, and suppliers to ensure they are paid for the labor and materials they provide.  The risk of foreclosing on a property deters many owners from unreasonably withholding payment when it is due.  But like any tool, you have to use it correctly to get the best results. Arizona’s lien laws are technical (see A.R.S. § 33-981 et seq.)   Avoid common mistakes by making sure you (a) timely serve a complete preliminary notice on each necessary party within 20-days of starting the work or first providing materials…
Whether the coronavirus has relieved either party of its contractual responsibilities depends on the specific facts of your situation and the wording of your agreement. As you work your way through the recent economic downturn and rebound, you may have concerns about meeting your contractual obligations or enforcing the obligations that other parties owe to you. In adapting your business practices to comply with CDC guidelines and the Governor’s orders, it is critical that you understand the provisions of your contracts and the steps you can take to protect yourself and your business. CHECK YOUR CONTRACTS Does your contract contain…
To help our LLC clients avoid the new law’s unfavorable default provisions, we offer a $900 flat-fee option for updating most operating agreements. On September 1, Arizona’s new LLC law goes into full effect, totally replacing Arizona’s original LLC statutes. The new law imposes various default provisions that, if not affirmatively addressed, could undermine some of the benefits that you expected to achieve by choosing an LLC form of entity. Those provisions include: fiduciary duties contributions and distributions record keeping personal liability indemnification dissolution dispute resolution Your LLC can avoid the new law’s default provisions, including the imposition of fiduciary…