West Coast Real Estate Update - May 2018

by Holland & Knight LLP
Contact

Holland & Knight LLP

New Rules on the Horizon to Reduce Emissions and Improve Air Quality

Facing pressure to meet federal clean air standards, California's South Coast Air Quality Management District (SCAQMD) voted 7-6 to direct staff to write new rules to reduce smog-forming emissions from truck traffic to and from local warehouses as well as in and around rail yards, ports, airports and new developments. The SCAQMD encompasses a wide area that consists of Orange County, most of Los Angeles County, most of Riverside County and the southwest portion of San Bernardino County.

In order to meet the federal ozone standard deadline in 2023, smog-forming emissions must be reduced by an additional 45 percent beyond the levels resulting from current regulations. Unlike factories, emissions related to warehouses, rail yards, ports and airports emanate from sources outside the direct control of the property owner. Therefore, these facilities will have to use indirect methods to control emissions, such as reducing the number of truck trips into or out of their facilities and utilizing zero or near-zero emission cargo-handling equipment.

The vote did not come without controversy, of course. Business and industry groups argued that imposing additional rules on warehouses could harm the local industry and result in diversion of cargo to other ports. Neighborhood and environmental groups countered by arguing that warehouses are often located in or near low-income neighborhoods, and these rules are necessary to protect residents who cannot afford to move elsewhere.  

California Legislators Revise "Efficient Proximate Cause" Statute in Response to Landslides

When landslides and mudflows destroyed homes, closed freeways and killed 21 people in January, people wondered what role the Thomas Fire played in the damage. Just a month earlier, in December 2017, the Thomas Fire scorched more than 281,000 acres, making it the largest wildfire in California's history and denuding entire landscapes of vegetation. Without healthy vegetation on hillsides, the January rains caused soil in the burn areas to flow off the hillsides into anything in its path.

The legal issue raised by this scenario centers around property insurance coverage and the legal causes of property damage. Most first-party insurance policies insure against loss or damage from fire, but specifically exclude coverage for damage resulting from landslides and mudflows. To determine whether insurance companies must cover damages caused by the landslides and mudflows that were partly caused by the Thomas Fire and other wildfires that plagued California last fall and winter, a California court will likely apply an efficient proximate cause analysis. Under an efficient proximate cause analysis, when a loss is caused by a combination of a covered risk and a specifically excluded risk, the loss is covered only if the covered risk is the most important or prominent cause.

California Insurance Commissioner Dave Jones already has issued a notice to insurance companies advising them that mudflow exclusions are unenforceable if the "efficient proximate cause" of the mudflow was a wildfire. More recently, the California legislature passed SB 917, which added Section 530.5 to Section 2 of the Insurance Code.

This new section specifies: "If a loss or damage results from a combination of perils, one of which is a landslide, coverage shall be provided if an insured peril is the efficient proximate cause of the loss or damage." Sections 530 and 532 already codify the efficient proximate cause analysis developed by California courts. This new section explicitly addresses landslides as one of the causes of damage or loss.

Since SB 917 was just passed on April 25, 2018, it is too early to tell what impact, if any, it will have on insurance coverages and any related litigation. However, the combination of action from the insurance commissioner and the California legislature appears to send a message to insurance carriers that damage caused by mudflows that would not have occurred absent the Thomas Fire most likely should be covered.

Los Angeles Passes Rules Governing Short-Term Rentals

The Los Angeles City Council recently unanimously approved a set of rules to govern short-term rentals within the city. The rules allow residential units to be rented out for a total of 120 days each year. A two-tier appeal process is created for those who wish to rent out their space for more than 120 days. The first tier creates an administrative appeal process whereby a unit can be rented out for a full year so long as the short-term rental host agrees to certain conditions, including registration requirements, approval from neighbors and clearing any nuisance citations. The second tier is for hosts that cannot meet the conditions of the first tier. It requires the host to obtain a discretionary approval from the city's planning director.

Under the new rules, only primary residences may be used for short-term rentals, and any housing units subject to Los Angeles' rent control ordinance would be prohibited from being used as short-term rentals. In addition, all short-term rental agreements will be subject to a 10 percent "bed tax," the proceeds of which shall be divided equally among Los Angeles' 15 council districts.

The rules authorized by the City Council still must go to the Los Angeles Planning Commission to formalize some of the details. The Los Angeles City Council will vote on a final version of the ordinance later this year.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Holland & Knight LLP | Attorney Advertising

Written by:

Holland & Knight LLP
Contact
more
less

Holland & Knight LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.