Friday, August 8, 2014

Buying a Home? Make Sure the Agent Considers You a "Client" and not a "Customer"

Buying a home in Fresno, California?  If yes, the house will likely be listed by a real estate agent.  This article is written for those of you that decide to buy the house from the listing agent.  (You know, you called the telephone number on the "For Sale" sign, the agent showed you the house and you want to put in the offer.)  If you decide to the buy the house through the listing agent, make sure this agent is willing to go the distance with you and call you a "client".  Otherwise, you might find yourself unrepresented should something go wrong.      


Are You Sure You are Represented?  You Might Only be a "Customer". 

Unfortunately in Fresno, some listing agents elect not to represent both buyer and seller.  Instead, they will have the buyer sign an upbeat document called something like the "Customer Confirmation" document.  They document will tell you how they are going to provide with this great customer service.  The true purpose of the document is to attempt to destroy the client/agent relationship.  You will sign this document together with the plethora of other documents necessary to purchase a home.  The document attempts to downgrade you from client to mere customer.  As a customer, they will show you the house, help you fill out paperwork, take your calls and walk you through the escrow service.  They will smile at you and give you a cold bottle of water as you sign paperwork essentially saying you had a chance to get help from another real estate agent and/or seek legal counsel, but you choose to represent yourself.  

Hopefully, nothing goes wrong with the transaction.      

Don't Be Downgraded to A "Customer".  You Deserve Representation! 

Great customer service has its place.  Disneyland is the epitome of customer service.  It is also at a restaurant or a hardware store.  It is not enough inside a real estate transaction.  That is why California law requires more than customer service from real estate agents and their clients.  California imposes a fiduciary duty on the real estate agent.  

Fiduciary duty is the type of duty you see between a lawyer and his client, between two business partners, or between a husband and wife.  It is more than good customer service.  It is the holiest of holiest of duties between two people.    

Here is how California regards fiduciary relationships:  every fiduciary owes her principal the duty of undivided loyalty.  He must give priority to the best interest of the beneficiary.  She is required to manage the subject matter with due care and must account to the beneficiary.  As you can see, it is more than smiles and filling out paperwork.  If a fiduciary makes a mistake, California law is equipped to hold the fiduciary accountable.

If the listing agent is treating you as "customer", you are forfeiting a lot of legal protection owed by a fiduciary.  The listing agent is hoping that he/she is only required to be honest, fair and provide full disclosure.  

The Listing Agent Is Allowed To Represent Both Buyer and Seller.  

  
The listing agent is allowed by California to represent both buyer and seller in the same transaction.  This type of representation is called "dual representation", where the agent represents both the buyer and seller.  Agents love this because they do not have to share the commission.  

It is not going to cost you, the buyer, or seller any more money for you to be represented by a real estate agent.  The seller of the house is going to pay the same commission regardless.

Do you want to work with a Fresno real estate agent who only legally wants to be plain old honest and fair with you?  Or, are you going to want and find an agent that is willing to represent you and provide you with undivided loyalty and look out for your best interest? 

This article was written with consideration to current trends in California.  Other states may have different laws.  Employing an attorney who handles real estate issues in your state is recommended before employing real estate agents or signing any written contract to purchase a home.  Employing a real estate agent that will represent you as a "client" is also recommended.  Customer service only goes so far.  

 
               



  

Monday, June 30, 2014

Riley v. California: Privacy in the contents of a Cell Phone?



Last week, the Supreme Court unanimously ruled in a case regarding the privacy a person can expect from the contents within a cell phone.  As an attorney, I have slowly began text messaging clients and I and my can have come to expect that these communications would be protected from a search from police.  While the communications are not really sensitive, I would My phone is password protected, but I am sure many of my clients have not put into place any protections.   

In Riley v California (Click here for full case) the US Supreme Court held that police must obtain a search warrant before examining the contents of a cellphone taken from a person that is arrested.  This is a good ruling.  The Court limited the scope of the search incident to a lawful arrest doctrine.  They accepted the argument that a cellphone is unlike the contents of your pocket, and can contain information for which a person is entitled to expect privacy.  Chief Justice Roberts wrote, "it is no exaggeration to say that many of the more than ninety percent of American adults who own a cell phone keep on their person a digital record of nearly every aspect of their lives — from the mundane to the intimate."  


Photo Credit: Ed Yourdon at Flickr

Friday, June 27, 2014

Wrongful Foreclosure: "MERS" Is Found Clear of Wrongdoing by 9th Circuit



Foreclosed homeowners hate "MERS", or Mortgage Electronic Registration Systems, Inc.  MERS has wrongfully foreclosed on thousands of homeowners through their shoddy record keeping practices.  Despite its horrible reputation, this institution's business model was validated by the Ninth Circuit court of appeals earlier this month in a case called In Re MERS, 11-17615.

Life Before MERS: Lenders Used the County Recorders Office


Before MERS the mortgage system was straightforward.  As you know, the lender owns the home loan borrower’s (or mortgagor’s) promissory note.  It is entitled to receive the monthly mortgage payment.  As such, the lender "benefits" from this right and is called the "Beneficiary".  The bank that receives the mortgage payment is a service provider.  It collects the mortgage payment, takes out a fee, and passes payment to the lender.  The Beneficiary is permitted to sell its rights to the promissory note -- and the right to collect the mortgage payment -- to another person, or company.  The sale of this right happens frequently.  Prior to MERS, these transactions were recorded with the county recorder's office and were public knowledge.  Any member of the public can review county recorder records.

MERS Saves Lending Institutions Time And Money By Becoming a Private Recorder's Office.

Here is the problem.  The "beneficiary"  would change so often, that the time and the expense of recording documents with the recorder's office became an issue.  MERS solved this problem for lenders.

MERS allows banks to avoid the bother and expense of recording every change of ownership of promissory notes.  Instead, ownership of the notes are processed through the MERS System and only recorded in the System’s electronic database.  The lender does not have to pay for someone to drive to the county recorder's office and pay the recorder's fee for the transaction.  With the number of times promissory notes are sold on a daily basis, this likely saves the lending institution billions of dollars per year.

The cost to the homeowner however can be secretive transactions and shoddy paperwork.    

How can MERS conduct by legal?  

 
MERS has been attacked by the lawyers for wrongful foreclosure.  In California, the law requires that, in order to bring a valid claim for tortious wrongful foreclosure, the plaintiff must allege that (1) the trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering.  (Lona v. Citibank, N.A.,  (2011) 134 Cal.Rptr.3d 622, 633.)

Excuses from California’s tender requirement are the following: (1) the underlying debt is void, (2) the foreclosure sale or trustee’s deed is void on its face, (3) a counterclaim offsets the amount due, (4) specific circumstances make it inequitable to enforce the debt against the party challenging the sale, or (5) the foreclosure sale has not yet occurred.  (Chavez v. Indymac Mortgage. Services (2013) 162 Cal. Rptr. 3d 382, 390.)

As it relatest to the In Re MERS case the 9th Circuit held that none of the plaintiffs has shown a lack of default, tender, or an excuse from the tender requirement.  As such, the MERS System continues to survive despite its shortcomings.

Photo: Simon Cunningham at Flickr

Tuesday, June 3, 2014

2 Ways to Stop Adverse Possession Easement



In California, an easement is typically the right to use another person's property for a particular purpose.  Common examples are people creating paths, or dirt roads to cross property to get to another property.  Sometimes, people will grow a garden with the mistaken belief it was their property. However you slice it, this type of use could put you, the landowner, at risk of someone else's claim of adverse possession.

How Is This Adverse Possession Easement Created In California?


A trespasser creates an adverse possession easement by using your property in a manner that is "hostile, actual, open and notorious, exclusive and continuous for a period of 5 years".  A trespasser also is required to have paid the local property taxes on the land.

To defeat this type of claim, we need to eliminate one of these many requirements before the end of 5 years.  Here are two practical mechanisms:

 1.Grant Permission To Use Land.

Give the trespasser permission.  That's correct.  Allow them to use the path or road.  Grant permission to grow a garden.  When permission is granted, the user of the property is no longer a "trespasser".  In other words, their use of your property is no longer "hostile", but passive.  Without "hostile" use of the property for 5 years, the adverse possession fails.  This should be done in writing, or by posting signs, reserving the right to terminate permission. 

2. Rent the Property

Have the trespasser pay you money for the use of the property.  If someone wants to remain on your property to grow crops, or to access another property, charge them rent.  Again, the act of entering into a rental agreement voids the hostile use of the property.  

3. If That Does Not Work ...

What if they do not want to pay rent?  Or what if you do not want to grant permission for free?  What can you do?  Any time it appears that a trespasser may be entertaining the idea of claiming your property under an adverse possession theory, you may need to file a lawsuit to eject the trespasser from the land. 

Act NOW, before the trespasser has been on your California property for five years to stop a successful adverse possession claim.

Photo credit:  Daniel Zedda at Flickr

Wednesday, May 28, 2014

Can I Evict My Roommate?


Maybe you are a student at Fresno State, or Fresno University.  Perhaps you and a friend decide to rent an apartment together to save on costs.  Or, you were kind enough to allow a friend to rent a bedroom in your apartment for a few months while she looked for a better job.  Sometimes, sharing living space just doesn't work out and it is time for your roommate to leave.  

Are you allowed to evict your roommate?  

The answer depends on whether your roommate can be classified as a subtenant.  Eviction proceedings generally work where you are the original tenant, or the one who has signed a lease or rental agreement with the landlord and the roommate you wan to evict is a subtenant renting part of your place.  The roommate would be paying rent to you and not your landlord.  

You cannot evict a roommate if you and your roommate are "cotenants."  You are cotenants if you both signed the lease.

Attorney Ken Jorgensen is located in Clovis, California.  He handles personal, property and business disputes, including bankruptcy and eviction cases in California.  You can find out more about Ken on Facebook, or at his websites, www.fresnolawgroup.com and www.fresnobankruptcylawgroup.com.  He can be reached at jorgensenlaw@gmail.com or by telephone at 1-559-324-1882.

Photo Credit: Maureen Didde at Flickr

Tuesday, May 20, 2014

"Lions, Tigers, or Bears, Oh My!" Ownership differences between California and the Land of Oz

Ben Salter at Flickr
Please don't ask why, but I found myself wondering how the State of California would treat Dorthy and friends-- Toto, Scarecrow, Lion, and the Tin man -- should they find this group walking down the road together.

In short, Dorthy might get herself in trouble for traveling with Lion, because he would be considered a wild animal.  Here is my "tongue-in-cheek" analysis of what would happen if Dorthy were in California, rather than Oz.

The right to own something in California is broadly defined by our Civil Code, Section 654.  It states that ownership is the right to possess and use something to the exclusion of others.  We are allowed to own the following:

  1. all inanimate things that are capable of appropriation or of manual delivery;
  2. all domestic animals;
  3. products of labor or skill as the composition of an author;
  4. goodwill of business;
  5. trademarks and signs; and 
  6. anything else that a statute allows.
TRF_Mr_Hyde at Flickr
So, it seems Toto is safe, though Dorthy best keep him on a leash inside City limits.  

Tin man and Scarecrow should be safe too.  Perhaps we could make the argument that scarecrows and robots are inanimate objects.  Also, they were likely the products of labor or skill.  I would say that they were abandoned by their previous owners, so she would likely beat any charges of theft or conversion.  

That leaves us with Lion.  Would Dorthy get into trouble for traveling with a lion?  Well, California does permit the ownership of certain wild animals.  Technically, wild animals are also the subject of ownership. California Civil Code section 656 provides: 

animals, wild by nature are subjects of ownership,  while living, only when on the land of the person claiming them, or when tamed, or taken and held in possession or when disabled and and immediately pursued. 
I am not quite sure how parts of this statute should be interpreted.  Perhaps if you find a wild tiger on your property, you could claim it, and thus be the owner.  It does seem that this statute allows for a hunter that has shot a wild animal to claim ownership after it has been shot and the hunter is in pursuit of the animal.  

Well, we know that Dorthy is from Kansas so she can't claim Lion is on her property.  Nor could I fathom Dorthy shooting Lion either.  Another California code provision seems to allow the ownership of wild animals that are raised for the fur pelt industry.  Dorthy would not have the heart to turn Lion into a rug!  

The right to possess, transport and own wild animals is, however, restricted in California's Fish and Game   See CAL. CODE REGS. Tit. 14 §671.  You need a permit from Fish and Game to possess, transport and own wild animals in California.  


As for Lion, California classifies him as a "carnivore".  Carnivores also include:
Raccoons, Ringtailed Cats, Kinkajous, Coatis, Cacomistles, Weasels, Ferrets, Skunks, Polecats, stoats, Mongoose, Civets, Wolves, Foxes, Coyotes, Lions, Tigers, Ocelots, Bobcats, Servals, Leopards, Jaguars, Cheetahs, Bears, etc.
In conclusion, it looks like Dorthy would need to obtain a permit from California's Fish and Game Department if she wished to travel with Lion on a yellow brick roads located in California.  I would make a hunch that only zoos and circuses are granted permits.  Dorthy would be out of luck and would likely be cited.    

 Attorney Ken Jorgensen is located in Clovis, California.  He handles personal, property and business disputes, including bankruptcy and eviction cases in California.  You can find out more about Ken on Facebook, or at his websites, www.fresnolawgroup.com and www.fresnobankruptcylawgroup.com.  He can be reached at jorgensenlaw@gmail.com or by telephone at 1-559-324-1882.

Monday, May 12, 2014

Can A Landlord Deduct Worn Out Carpet From Security Deposit?



California Civil Code Section 1950.5 discusses the rules of how a landlord can use a tenant's security deposit.  How does carpet get treated under the statute?

Here is the language from the statute of permissible deductions:

   (1) The compensation of a landlord for a tenant's default in the
payment of rent;

   (2) The repair of damages to the premises, exclusive of ordinary
wear and tear, caused by the tenant or by a guest or licensee of the
tenant.

   (3) The cleaning of the premises upon termination of the tenancy
necessary to return the unit to the same level of cleanliness it was
in at the inception of the tenancy.

Disclaimer: Ultimately, whether the landlord made a proper deduction in your case depends on facts that will ultimately be evaluated by a judge.  This article is not meant to provide you legal advice on your specific case, but is meant to discuss California law in general.  If you are in this situation, you should seek independent legal advice and not rely on this article.

Repair


Suppose a cigarette burn is in the carpet, but the burn was in the carpet before the beginning of the tenancy. According to the security deposit statute, the cigarette burn would be a defective condition
from another tenancy.  Hence it would not have been caused by the tenant.  A cigarette burn caused by a guest of the tenant would be a permissible deduction under the statute.

Ordinary Wear and Tear

Suppose an itemized statement from the landlord deducts 50% of the value of the carpet for wear and tear caused by the tenant.  Worn carpet, if ordinary, falls under wear and tear, which is excluded by the the "exclusive of ordinary wear and tear" portion of the statute.

Cleaning Carpets

Cleaning carpets is the most often contentious part of the security deposit.  The statute provides that the apartment must be returned to the same level of cleanliness it was at the beginning.  This is going to be the deciding factor.  Was the carpet steamed cleaned at the beginning of the tenancy?  Can the tenant rent a cleaner from SaveMart and clean the carpet as good as a professional?  These are issues that if the landlord and tenant disagree, will have to be determined in small claims court.  Before and after pictures are helpful as well as whether the landlord can show he or she had the carpets cleaned professionally before the tenancy began.


Attorney Ken Jorgensen is located in Clovis, California.  He handles personal, property and business disputes, including bankruptcy and eviction cases in California.  You can find out more about Ken on Facebook, or at his websites, www.fresnolawgroup.com and www.fresnobankruptcylawgroup.com.  He can be reached at jorgensenlaw@gmail.com or by telephone at 1-559-324-1882.