Real Estate Litigation Blog

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…
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…
On March 5, 2020, Colorado Governor Polis issues executive order D 2020 012, which among other things imposed temporary limitations on evictions, foreclosures, and public utility disconnections. After being amended and extended three times (through April 30, 2020 via D 2020-0131, then for an additional 30 days via D 2020 051, and finally for an additional 15 days from May 29, 2020 via D 2020 088), this executive order expired on Saturday, June 13, 2020. In its stead, the Governor issued a more limited Executive Order—D 2020 101 (the “Order”)—which is effective through July 13,…
By:  Bob Henry As part of the State of Arizona’s response to the current public health crisis, on March 24, 2020, Arizona Governor Ducey issued Executive Order 2020-14, titled “Postponement of Eviction Actions.” A copy of the Executive Order is linked here:  https://azgovernor.gov/executive-orders Residential landlords considering taking any action against tenants, including evictions, should be aware of this Order before proceeding. In summary, the Order effectively requires all Arizona law enforcement officers who are typically charged with enforcing “eviction action orders” (from Arizona courts) to “temporarily delay enforcement” of such orders in various circumstances, including for tenants who are…
By: Colton Addy Applicability of California’s Rent Control Laws:  California Civil Code Sections 1946.2 and 1947.12 took effect on January 1, 2020, and implement statewide rent control in California for most residential properties.  The rent control laws, however, do not apply to a rental property that was issued a certificate of occupancy in the last 15 years.  (Civ. Code §§ 1947.12(d)(4), 1946.2(e)(7)).  The statutes also do not apply to most single-family residences, provided that (a) the owner is not a real estate investment trust, a corporation, or a limited liability company where one of the members is a corporation, and…
By: Ben Reeves That pesky excess sale proceeds statute, A.R.S. § 33-727, is making waves again. We previously blogged about this statute here. In the prior post, we explained that excess sale proceeds (i.e., a foreclosure sale price greater than the lien being foreclosed) must be used to pay other lien creditors, in full, before the owner receives anything. Recently, the Arizona Court of Appeals held that creditors also take excess sale proceeds before the person who purchased the property at foreclosure. The case, Vista Santa Fe Homeowners Association v. Millan, No. 1 CA-CV 18-0609 (Ct. App. Oct.
By Patrick Paul As municipalities around the country evaluate changes to their respective codes in an effort to exert greater control over bad actors in the vacation rental market, Airbnb announced on November 2nd that it is banning party houses.  The move comes in response  to the shooting deaths of five people at a Halloween party hosted at an Airbnb rental house in Orinda, CA.  CEO Brian Chesky announced on Twitter that starting November 2, Airbnb would ban “party houses” and  redouble the company’s efforts to “combat unauthorized parties and get rid of abusive host and guest conduct.” twitter.com/bchesky The…
The advent of the shared economy in the real estate context has provided homeowners and investors alike with expanded opportunities to generate revenue from the use of their real estate. Airbnb and VRBO are two of the most popular companies facilitating short-term rental availability. The rapid growth in this shared real estate economy has served as a disruptor of sorts to the traditional hotel and hospitality industry, causing that industry to revisit its own models in order to better compete.   The popularity of short-term rental use, however, has created a whole new set of problems about which property owners,…
By: Kevin J. Parker In a recent Arizona Court of Appeals case, Helvetica Servicing, Inc., v. Pasquan, 2019 WL 3820015, (8/15/19), the Court of Appeals addressed the distinction between (1) a construction loan (or refinance of same) and (2) a home improvement loan (or refinance of same), as it relates to Arizona’s anti-deficiency statute, A.R.S. §33-729(A). In general, an anti-deficiency statute provides that although a purchase-money lender or a construction lender can – in appropriate circumstances – foreclose on their loan and cause a sale of the property to pay the loan, the lender cannot (if the statutory criteria are…
The Colorado legislature had a busy session this year.  Among the several significant bills it enacted, HB1170 strengthens tenant protections under the implied warranty of habitability.  It became effective on August 2, 2019, so landlords and tenants alike are now subject to its requirements. The bill makes numerous changes to Colorado’s implied warranty of habitability, and interested parties should review the bill in detail.  Landlords in particular may want to consider retaining legal counsel to make sure they have proper procedures in place to promptly deal with any habitability complaints within the new required timelines.  This posting is not intended…
By: Tony Carucci A so-called “offer to compromise” under California Code of Civil Procedure section 998 can reverse the parties’ entitlement to costs after the date of the offer, depending on the outcome of the litigation. Cal. Code Civ. Proc. § 998. When making a 998 offer, parties may designate the plaintiff as the prevailing party and provide that the plaintiff may seek attorneys’ fees allowed by law, or expressly include the plaintiff’s attorneys’ fees within the amount of the offer. But does an offer that simply provides that the plaintiff may seek attorneys’ fees “allowed by law” provide the…
By: Ben Reeves Although legal in many states, marijuana remains illegal under federal criminal law. See 21 U.S.C. § 856(a)(1). One would think that engaging in illegal activity under federal criminal law would preclude relief under federal bankruptcy law. And, in fact, several bankruptcy courts have reached that exact conclusion. See, e.g., In re Rent-Rite Super Kegs West, Ltd., 484 B.R. 799 (Bankr. D. Colo. 2012) (“[A] federal court cannot be asked to enforce the protections of the Bankruptcy Code in aid of a Debtor whose activities constitute a continuing federal crime.”). That bright-line rule, however, may now…
By:  Lyndsey Torp In reversing summary judgment for defendants, the California Fourth District Court of Appeal recently held that homeowners suing their real estate broker for negligence did not need an expert witness to establish the elements of their causes of action. Ryan v. Real Estate of the Pacific, Inc. (2019) 32 Cal. App. 5th 637. Typically, expert witnesses are required to establish the standard of care in professional negligence cases. But in Ryan, the court of appeal held that the “common knowledge” exception applied despite this general rule, because the conduct required by the particular circumstance of the case…