respa-3California law allows commission splits and finders fees to be paid, but under the Federal Real Estate Settlement procedures Act (RESPA) they may not be legal.  If your seller or buyer wants you to split the broker’s commission with them, that may not be legal unless the seller/buyer is also a real estate licensee.    A finder can only introduce the parties, a finder cannot be involved in showing the property or advising or negotiating any terms.  (See also 78 Ops Cal Atty Gen 71)

Now if you are dealing with a single family house or up to 4 units, RESPA kicks in if a federally insured mortgage is involved (and usually they are).  RESPA prohibits all consideration if is in exchange for referral relating to the real estate settlement.  Now you need to look at what is a real estate settlement which is basically anything that leads to an escrow closing with a federally insured loan.  (12 USC 2607(a),  12 USC 2603(3))  RESPA 100% bars finder’s fees, but between brokers, referral fees are allowed.

Chicago TitleI love Chicago Title (even if it and many other title companies are all owned by the same conglomerate Fidelity Title!).  Here is a link for many basic real property related forms.  http://www.chicagotitlela.com/blank_documents.html

Don’t forget, its not the form, but what you put in the form that counts.  So hire a lawyer!  And if you want the best Chicago Title Escrow officer, call Cheryl Yanez (213) 488-4315

transfer on death deedThis provides a simple way to transfer California real estate at death without having to go through California probate.  (Probate Code §5600, et seq.)  The way to look at this is it is a “Transfer-On-Death Deed ” NOT a transfer during life deed.  It only applies to residential properties and must be promptly recorded after it is notarized.  This document is exempt from documentary transfer tax under Rev. & Tax. Code §11930. This document is exempt from preliminary change of ownership report under Rev. & Tax. Code §480.3.

For the specific requirements, click here: Continue Reading Revocable Transfer-On-Death Deeds (aka Lady Bird Deed) New Since 2016! (Probate Code §5642)

Contract

A common question is how to count the days referred to in the Real Estate Purchase Agreement and related CAR (Calif. Assoc. of Real Estate) forms.  In October 2016 CAR published a concise article on this in their magazine.  In essence the CAR attorneys confirmed that every day counts, even holidays, but if the last day is a weekend or holiday, then the next business day would be the last day.  That confirms with Code of Civil Procedure §12.  More specific examples how to apply this are as follows and are in this great article and summarized below.  See also  http://www.onlinedigitalpubs.com/publication/?i=341167 Continue Reading Counting Days and Loopholes in CAR Real Estate Purchase Agreement Forms

promissory-note-elpWhile Commercial Code 3118(a) provides for a 6 year statute of limitations which can apply to a promissory note (9-109(a)(3).  The key is this ONLY applies to a negotiable instrument (Comm. Code §3102)  So,  you have to make sure your promissory note falls under the Commercial Code.  Most real estate promissory notes do NOT qualify as negotiable instruments.  Here are some factors to consider : Continue Reading Does a 6 year statute of limitations apply to a promissory note secured by real property?

Home-Inspection-Issues-The Business and Professions Code §7199 provides up to four years to bring suit for breach of a home inspector‘s duty to use the degree of care a reasonably prudent home inspector would exercise.
Moreno v. Sanchez, 106 Cal. App. 4th (2003) 1415, 1429

Business and Professions Code section 7199 provides the time to bring an action against a home inspector for “breach of duty arising from a home inspection report shall not exceed four years from the date of the inspection.”

House with gavelStatutes of limitations are confusing.  A common mistake is most lawyers do not know that the statute of limitations to file a lawsuit against a real estate broker runs from the date of possession, or date of close of escrow, not discovery of the mistake, misrepresentation, breach or harm.  See Civil Code §2079.4.

Civil Code § 2079.4. Limitation of actions

In no event shall the time for commencement of legal action for breach of duty imposed by this article exceed two years from the date of possession, which means the date of recordation, the date of close of escrow, or the date of occupancy, whichever occurs first.

marijuana_legal_gavel_620x350Medical and probably soon recreational marijuana is going to be a hot box for landlords and tenants.  Medical marijuana is also NOT a basis nor does it create “civil rights” for residential tenants to smoke in their apartments!!  Health and Safety Code §11362.5 (Compassionate Use Act of 1996 “CUA”) allows medical marijuana to be purchased, possessed and used. There are many levels and issues, but here is a sampler.  This is one confusing, vague, and evolving area of law and how it impacts employers and landlords.  Make sure to check current law both state, national and local (city), as all laws apply. Continue Reading Marijuana Laws and Landlord-Tenant Rights

house roll money earnest_money_depositReal Estate Purchase Agreements and Leases (e.g. CAR forms) include deposits may or may not be refundable.    Liquidated damages must bear a reasonable relation to the anticipated damages incurred.  (See Civil Code §§1670, 1671).  For Residential transactions, if 3% or less the presumption is the liquidated damages amount is reasonable.  (Civil Code §1675(c)  Assuming the buyer refuses to allow the deposit to be released to seller, then a liquidated damages clause also benefits the seller as they do not need to prove actual damages from the loss of the sale.  Continue Reading Liquidated Damages Clause → Is the Deposit Refundable to the Buyer?

Earnest Money depositDeposits are generally refundable unless there is a lawful liquidated damages clause.  The burden is on the party claiming the deposit to show it is a proper liquidated damages and not an improper “forfeiture” and the written agreement bars return of the deposit.  Buyers have several powerful arguments for the refund of their deposit even if the written agreement states the deposit is non-refundable.  Cases such as Kuish v. Smith (2010) 181 CA4th 1419 also support buyers getting their deposit back when there is no liquidated damages clause, but only a clear “the deposit is non-refundable” clause.  See also Civil Code §§1670, 1671 as to liquidated damages. Continue Reading When is Deposit for Purchase of House is Refundable? (Contract states deposit is NOT refundable)