Mortgage lenders tend to pay a lot of attention to the real property securing their loans, as they should.
Before the loan is made, lenders scrutinize the property to evaluate whether its fair market value will support the...more
Most developers are familiar with the notion that under California’s Subdivision Map Act, the vesting tentative map statutes provide a way of fixing a developer’s rights. Put simply, obtaining a vesting tentative map allows...more
Most LLC operating agreements contain a “buyout” provision allowing the LLC or its remaining members to buy the membership interest of a departing member. Buyout provisions can be structured however the LLC members see fit. ...more
When any real estate investment deal goes badly and ends in litigation, there are many reasons why a potential plaintiff may prefer one forum versus another, including the location of witnesses and documents, location of...more
9/25/2020
/ Appeals ,
Choice-of-Law ,
Contract Terms ,
Conversion ,
Deed of Trust ,
Dismissals ,
Forum Selection ,
Investors ,
Joint Venture ,
Motions to Quash ,
Passive Investments ,
Personal Jurisdiction ,
Purposeful Availment Test ,
Reaffirmation ,
Real Estate Development ,
Real Estate Investments
A huge THANK YOU to Ryan Lockhart — an excellent tax and estate planning attorney and podcast host at the McKenna Brink Signorotti LLP law firm in Walnut Creek, California — for having me on the podcast as a guest!
I am a...more
After a foreclosure sale by a senior creditor, California’s Civil Code section 2924k governs how the sale proceeds are applied in the following order of priority...more
Can the sledgehammer remedies of California Penal Code section 496 — treble (triple) damages and attorney fees — apply for misappropriation of an LLC’s property?
The California Supreme Court is set to answer that question...more
8/20/2020
/ Attorney's Fees ,
Breach of Duty ,
CA Supreme Court ,
Fraud ,
Limited Liability Company (LLC) ,
Litigation Fees & Costs ,
Managing Members ,
Members ,
Misappropriation ,
Penal Code ,
Receiving Stolen Property ,
Remedies ,
Split of Authority ,
Theft ,
Treble Damages
Can a California real property owner challenge a lender’s authority to foreclose before a foreclosure sale has occurred? It’s looking less likely with each new appellate opinion....more
7/31/2020
/ Appeals ,
Assignments ,
Borrowers ,
Deed of Trust ,
Foreclosure ,
Lack of Authority ,
Lenders ,
Preemptive Challenges ,
Property Owners ,
Residential Property Owners ,
Split of Authority ,
Standing
LLC managers (or members vested with decision-making authority) are sometimes lulled into a false sense of security by “sole discretion” provisions in their LLC’s operating agreement. That can be a costly mistake....more
Flashback: Five years ago, Money and Dirt covered the Salazar v. Thomas opinion from California’s Fifth District Court of Appeal holding that a Notice of Default does not “disturb possession” sufficiently to start the...more
6/29/2020
/ Action to Quiet Title ,
Appeals ,
Borrowers ,
Deed of Trust ,
Foreclosure ,
Foreclosure Sales ,
Home Equity Line of Credit ,
Lenders ,
Notice of Default ,
Notice Requirements ,
Property Owners ,
Real Estate Transactions ,
Reversal ,
Statute of Limitations ,
Time-Barred Claims ,
Trustee Sales ,
Trustees
LLC membership interests are usually straightforward and can determined by simply reviewing the LLC’s operating agreement. The operating agreement typically lists the members. Sometimes the operating agreement will impose...more
The statutory scheme governing nonjudicial foreclosure — found in California Civil Code sections 2924 through 2924k — aims for speed, efficiency, and finality.
For example, a bid at a trustee’s sale is deemed to be an...more
A common LLC problem:
LLC members are ready to call it quits on the LLC and divide their interests in the LLC’s real property.
Some members may want to sell, receive cash, and recognize gains for tax purposes.
Other...more
5/18/2020
/ Corporate Dissolution ,
Franchise Tax Board ,
Internal Revenue Code (IRC) ,
Limited Liability Company (LLC) ,
Members ,
New Guidance ,
Post-Dissolution Suits ,
Real Estate Transactions ,
Real Estate Transfers ,
Section 1031 Exchange ,
Tax Appeals ,
Tax Court ,
Tenancy-in-Common
A landowner grants a license by allowing someone else to use the land. A license can be created by express permission, or by acquiescence (allowing the use with full knowledge and without objecting). Normally, a license is...more
4/27/2020
/ Appeals ,
Commercial Real Estate Contracts ,
Covenants that Run With the Land ,
Easements ,
Irrevocable License Agreements ,
Land Owners ,
License Agreements ,
Notice Requirements ,
Parking Lots ,
Property Ownership ,
Purchasers ,
Recording Acts ,
Reversal ,
Subsequent Purchasers ,
Warehouses
Almost one year ago, in Switzer v. Wood, California’s Fifth Appellate District held that an LLC manager or member participating in the theft of the LLC’s property could face liability under Penal Code section 496 — a statute...more
4/20/2020
/ Appeals ,
Attorney's Fees ,
Breach of Duty ,
Fraud ,
Limited Liability Company (LLC) ,
Managing Members ,
Members ,
Misappropriation ,
Misrepresentation ,
Penal Code ,
Punitive Damages ,
Receiving Stolen Property ,
Split of Authority ,
Theft ,
Treble Damages
Loans secured by a deed of trust typically provide that upon default (commonly, missed interest payments) the lender may elect to “accelerate” the loan, making the entire balance of principal and interest due....more
Under the “default” rules of most limited liability company laws, including California’s Revised Uniform Limited Liability Company Act, LLC managers owe fiduciary duties to the LLC and its members. Those default fiduciary...more
Under California law, receivers can be appointed for many purposes.
Sometimes a “general equity” receiver is appointed to take control of a business entity and its assets where the decision-makers are deadlocked in...more
2/27/2020
/ Abatement ,
Appeals ,
Building Codes ,
City Councils ,
Court-Appointed Receivers ,
Dismissals ,
Distressed Properties ,
Failure to Cure ,
Hotels ,
Notice Requirements ,
Nuisance ,
Pre-Trial Motions ,
Property Valuation ,
Public Nuisance ,
Rehabilitation and Restoration Plans ,
Reversal ,
Reversible Error ,
Right To Cure ,
Safety Violations
Limited liability companies (LLCs) are a popular modern form of business entity celebrated for their ease of implementation and informality. Despite the enactment of uniform legislation providing the “default” rules for LLC...more
To be enforceable, a deed of trust must sufficiently describe the real property security.
There are several different ways to describe real property. Commonly used methods include referring to a block and lot number from a...more
Today’s post focuses on a thorny issue arising from the LLC Jungle — can derivative claims be pursued on behalf of a dissolved or cancelled LLC?
In short, the answer is “yes” — but there are nuances to be aware of....more
In the world of eminent domain, compensation for “lost goodwill” is often a tricky and contentious issue. New opinions from the Court of Appeal addressing goodwill tend to get a lot of attention....more
In the LLC Jungle, allegations of “misappropriation” are common. LLC members and managers sometimes improperly divert the LLC’s funds and property for their own personal use. That bad behavior usually leads to claims of...more
12/16/2019
/ Appeals ,
Attorney's Fees ,
Breach of Duty ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Managing Members ,
Members ,
Misappropriation ,
Penal Code ,
Receiving Stolen Property ,
Remedies ,
Stolen Goods ,
Theft ,
Treble Damages
Borrowers looking to invalidate a foreclosure sale often come up with interesting theories.
One frequent strategy is to attack the validity of a prior assignment of the underlying note and deed of trust. As explained in...more
11/25/2019
/ Appeals ,
Assignments ,
Borrowers ,
Deed of Trust ,
Default ,
Dismissals ,
Foreclosure Sales ,
Loans ,
Mortgage Lenders ,
Mortgages ,
Validity ,
Wrongful Foreclosures
Not long ago, The LLC Jungle posted an article addressing the perils of attorney representation of an LLC with two equal “co-managing members.” See Why Having “Co-Managers” for Your LLC is a Terrible Idea.
This post...more
11/20/2019
/ Appeals ,
Attorney Malpractice ,
Attorney Representation Agreements ,
Breach of Duty ,
Business Disputes ,
Client Representation ,
Copyright Infringement ,
Copyright Litigation ,
Corporate Counsel ,
Duty of Care ,
Involuntary Dissolution ,
Limited Liability Company (LLC) ,
Managing Members ,
Members ,
Operating Agreements ,
Reaffirmation ,
Summary Judgment