Real Estate Transactions and Litigation

Gray•Duffy, LLP provides a wide range of services in both real estate transactions and litigation.

Real Estate Transactions

From commercial/industrial buildings to single-family residences, we handle all phases of acquisition, development and operations, including:

  • Commercial lease preparation and reviews
  • Commercial real estate developments
  • Commercial real estate transfers
  • Questions of ownership and title holding
  • Joint tenancy vs. tenants in common
  • Conditional use permits or variances
  • Land use disputes
  • Construction contracts
  • Tax implications of property ownership and selling real estate
  • Legal contracts, such as mechanic’s liens and stop notices
  • Partition of property or quiet title, zoning laws and infractions
  • Complex loan documents, foreclosures, short sales and deeds in lieu
  • Easements, licenses and other access issues
  • Obtaining entitlements and other land use permits in the development process
  • Private placements and other syndications of real estate investments
  • 1031 Exchanges, real property trusts, and other tax mitigation strategies

Real Estate Litigation

We provide comprehensive real estate litigation services, including commercial landlord evictions, foreclosure litigation, title insurance lawsuits, boundary disputes, party wall litigation, mechanic’s liens and foreclosure actions, quiet title actions, receiverships and much more.

Our real estate litigation services include:

  • Condominiums and common interest developments
  • Construction litigation
  • Easements and encroachments
  • Fraud
  • Leases and sales
  • Representation of licensees of the Department of Real Estate, the Department of Corporations and the Contractors State License Board
  • Disputes by, between and against brokers and agents
  • Disputes by, between and against investor members or shareholders in real estate development or investment limited liability companies or corporations
  • Adjoining landowner disputes
  • Breach of fiduciary duties claims

Real Estate Laws
Gray•Duffy provides the following summaries of recent real estate laws which may impact our clients.

Broker/Agent Dual Agency
It is well settled that an agent who represents both buyer and seller owes fiduciary duties to both parties. In Hiroshi Horiike v. Coldwell Banker Residential Brokerage Company, 1 Cal.5th 1024 (2016), the Court extended fiduciary duties to brokerage companies. The Horiike holding imposes the same fiduciary responsibilities on a listing salesperson as on the selling salesperson, if the same broker employs both agents and the property is nonresidential real estate. See Civ. Code, § 2079.13. The statutory recitals include matters that under the inspection and disclosure statutes (e.g. §§ 2079.1 to 2079.12) are limited to residential real estate. As such, the exact operation of Horiike as applied in commercial real estate transactions may not be identical to residential transactions, although the issue is far from clear. Problems with or for brokers arising from dual agency transactions occur all too frequently.

Challenging Agency Bias & Findings In Real Property Administrative Hearings
The plaintiffs in Attard v. Board of Supervisors of Contra Costa County, (2017 WL 3711765) (Aug. 2017), formulated a creative solution to circumstances constraining development on their two properties in Contra Costa County (County), but they failed to obtain the necessary regulatory approvals for their plan. Notwithstanding that failure, the County issued permits to develop the properties, including a permit for construction of an 8,400-square foot home. By the time the County discovered its error and notified the Attards, they had made substantial progress toward installing a foundation for the new home on one of the properties. The County revoked the permits, a decision that was affirmed by the County Board of Supervisors (Board). The Attards filed a petition for writ of mandate challenging the revocation in which they contended in part that they were denied due process by the evident bias of one Board member. The trial court denied the writ petition, which the court of appeals affirmed. There was no dispute that the Attards did not raise the issue of a Board member’s possible bias at the Board hearing. See 2017 WL 3711765 *9. Accordingly, the Attard court held that the Attards’ failure to raise this issue before the Board resulted in a waiver the claim of bias.

Short Sales and Anti-Deficiency Law
The Court of Appeal held that a lender who approves a short sale and accepts less than the loan balance on a purchase money loan cannot recover the deficiency. Chase Bank approved the plaintiff’s request for a short sale but required the plaintiff to agree to be “responsible for any deficiency balance remaining on the loan after application of the proceeds received by Chase Bank.”

Thus, Chase Bank released its lien rights so the short sale could close, but retained the right to collect against the original borrower for the difference between the loan balance and for sales price. After the short sale close, Chase demanded the difference. The plaintiff sued for declaratory relief and Court of Appeal agreed, holding that Section 580b of the Code of Civil Procedure (the anti-deficiency statute) applied not only to foreclosure sales but to short sales as well. Coker v. JP Morgan Chase (2013)

Americans with Disabilities Act

In an effort to curb the predatory practices of some “professional” plaintiffs, commercial buildings completed after January 1, 2008 may have 60 days to fix any disability access violations, in which case statutory damages may be reduced from $4,000 per incident to $1,000. In addition, commercial landlords must disclose in writing to prospective tenants for leases entered into after July 1, 2013 whether or not a CASp inspection has been performed on the building.

Landlord-Tenant and NODs
A new law requires landlords to give prospective tenants certain notice when the property is going into foreclosure. If a landlord receives a notice of default (NOD) on a one-to-four unit residential property, the landlord must comply with new Civil Code Section 2924.85, which requires tenants who are contemplating renting such property to be given notice that the property could be going into foreclosure. Failure to provide the notice subjects the landlord to monetary penalties.

Landlord-Tenant and Abandoned Property
The threshold in Civil Code Section 1984 has been increased from $300 to $700 of what may be considered by the landlord to be “abandoned property.” If the landlord follows the proper notice requirement to the former tenant, and the abandoned property is reasonably determined to be less than $700, the landlord may dispose of the property without liability to the tenant.

Anti-deficiency law and the one-form-of-action rule
Effective July 15, 2011, Code of Civil Procedure Section 580e was amended to expand the anti-deficiency protection in the context of short sales. Previously, the anti-deficiency statute only protected the borrower only under a first deed of trust. New law now extends to any deed of trust, including junior lien holders if the holder of the deed of trust consents to a short sale and receives the sale proceeds as agreed. Previously, Section 726 of the Code of Civil Procedure – the one-form-of-action rule – did not apply to a short sale in which the lender consented to the release of its lien only and the borrower agreed to remain personally liable on the loan. Bank of America, N.A. v. Roberts (2013) [citation]

Rent control
A landlord’s notice to its tenant that the tenant’s failure to maintain insurance would be henceforth deemed a material breach that would result in a forfeiture of the lease, was a unilateral change of the terms of the lease and was held to be invalid under the Los Angeles Rent Stabilization Act. Nivo 1, LLC v. Antunez (2013) [citation]

Recent Case Law Holds Different Salespersons Under the Same Broker As Dual Agenda
It is well established that a dual agent owes a fiduciary duty to both the buyer and the seller. A recent case determined that when a buyer and seller are working with different salespersons in the same brokerage – even different offices – both the broker and the salespersons are dual agents. Therefore, the case held that whether the broker is a natural person or a corporation, the salespersons on either side of the transaction owe a fiduciary duty to both the buyer and the seller.

California Appellate case:
Horiike v. Coldwell Banker Residential Brokerage, filed April 9, 2014, Second District, Div. Five, 225 Cal.App.4th 427; 169 Cal.Rptr.3d 891

Limited Liability Partners and Aiding and Abetting
American Master Lease LLC v. Idanta Partners, Ltd. (Second Dist., Div. Seven, 5/5/14), recently published the holding that a defendant can be liable for aiding and abetting breach of fiduciary duty without owing the plaintiff a fiduciary duty.

Please contact our firm for additional information regarding our work on real estate transactions and litigation. You will be directed to one of our attorneys who practice in this area. References are available upon request.