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Liquidated Damages: Too High and It’s a Penalty. Too Low and You’re Out of Luck.

By: Christian Fernandez Liquidated damages provisions in commercial and residential real estate contracts play a vital role when a transaction goes south, and should be given careful consideration when negotiating a real estate contract. Liquidated damages may be referred to in a variety of ways, such as “earnest money,” a “good-faith deposit,” or a “non-refundable […]

Amada Family Limited Partnership v. Pomeroy: Colorado Court of Appeals expressly affirms the continuing viability of the common-law after-acquired title doctrine and expressly recognizes utility easements by necessity

On May 27, 2021, a division of the Colorado Court of Appeals issued its opinion in Amada Family Limited Partnership v. Pomeroy, 2021 COA 73.  In that case, the court decided two significant issues that apparently had never been expressly ruled on by a Colorado appellate court before: (1) that Colorado’s common-law after-acquired title doctrine […]

LM
Former Associate

Tort Claims Against an Alter Ego May Be Considered an Action “On a Contract” for the Purposes of an Attorneys’ Fees Award under California Civil Code section 1717

By: Tony Carucci California Civil Code section 1717 entitles the prevailing party to attorneys’ fees “[i]n any action on a contract,” where the contract provides for an award of attorneys’ fees to the prevailing party, regardless of whether the prevailing party is the party specified in the contract or not. But what about an action […]

Married Couple’s Acquisition of Title as Joint Tenants Does Not Rebut the Presumption of Community Property

By:  Kevin J. Parker https://www.swlaw.com/people/kevin_parker In re Brace, 470 P.3d 15 (Cal. 2020), a California married couple acquired real property with community funds, and took title as “husband and wife as joint tenants.” When the husband filed a chapter 7 petition in bankruptcy, the bankruptcy trustee sought to include the property in the debtor’s estate. […]

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KP
Former Counsel

Does a Broker Forfeit His or Her Commission for Technical Non-Compliance with Department of Real Estate Statutory Requirements?

By: Kevin J. Parker In a recent Arizona Court of Appeals case, CK Revocable Trust v. My Home Group Real Estate LLC, 2020 WL 4306183 (7/28/2020), the Court of Appeals addressed the distinction between “substantive” and “technical” statutory requirements for real estate broker commission agreements. The Court explained that failure to comply with a substantive […]

KP
Former Counsel

Arizona Governor Ducey’s Executive Order on Residential Eviction Actions

By:  Bob Henry As part of the State of Arizona’s response to the current public health crisis, on March 24, 2020, Arizona Governor Ducey issued Executive Order 2020-14, titled “Postponement of Eviction Actions.” A copy of the Executive Order is linked here:  https://azgovernor.gov/executive-orders Residential landlords considering taking any action against tenants, including evictions, should be aware […]

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BH
Partner

Airbnb Declares End to Party!

By Patrick Paul As municipalities around the country evaluate changes to their respective codes in an effort to exert greater control over bad actors in the vacation rental market, Airbnb announced on November 2nd that it is banning party houses.  The move comes in response  to the shooting deaths of five people at a Halloween […]

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Short-Term Rental Legislation & Litigation On the Way!

The advent of the shared economy in the real estate context has provided homeowners and investors alike with expanded opportunities to generate revenue from the use of their real estate. Airbnb and VRBO are two of the most popular companies facilitating short-term rental availability. The rapid growth in this shared real estate economy has served […]

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CCP 998 Does Not Confer an Independent Right to Attorneys’ Fees

By: Tony Carucci A so-called “offer to compromise” under California Code of Civil Procedure section 998 can reverse the parties’ entitlement to costs after the date of the offer, depending on the outcome of the litigation. Cal. Code Civ. Proc. § 998. When making a 998 offer, parties may designate the plaintiff as the prevailing […]

That’s Common Knowledge! Failure to Designate an Expert Witness in a Professional Negligence Case is Not Fatal Where “Common Knowledge” Exception Applies

By:  Lyndsey Torp In reversing summary judgment for defendants, the California Fourth District Court of Appeal recently held that homeowners suing their real estate broker for negligence did not need an expert witness to establish the elements of their causes of action. Ryan v. Real Estate of the Pacific, Inc. (2019) 32 Cal. App. 5th […]

LT
Former Senior Attorney

Land Banking. Why Consider It?

By: Lauren L. Munsell For homebuilders, financing a real estate transaction, oftentimes via an institutional lender, is common place in the industry.  But what is land banking and why should it be considered by homebuilders? Land banking is an off-balance sheet financing structure whereby the land banker purchases fee title to the homebuilder’s desired lots […]

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LM
Former Associate

What If Your CCP 998 Offer is Silent on Costs?

By: Tony Carucci In California, the “prevailing party” in litigation is generally entitled to recover its costs as a matter of law. See Cal. Code Civ. Proc. § 1032. But under California Code of Civil Procedure section 998, a party may make a so-called “offer to compromise,” which can reverse the parties’ entitlement to costs […]

Homie Can’t Do That

By:  Patrick J. Paul The Arizona Attorney General recently reached an agreement with Utah-based real estate company Homie which made a splash in the Phoenix market during the fall election with candidate-type signage posted throughout the community urging a “Vote for Homie” as significant change and assured that such change would be “coming to your […]

Arizona Court Determines Statute of Limitations Applicable to a Claim for Reformation of a Deed of Trust (and a Related Claim for Declaratory Judgment)

By:  Kevin J. Parker In a recent Arizona Court of Appeals case, Deutsche Bank National Trust Co. v. Pheasant Grove LLC, 798 Ariz. Adv. Rep. 15 (August 23, 2018), the Court of Appeals addressed the question of what statute of limitations was applicable to a declaratory judgment claim.  In that case, a bank’s deed of […]

KP
Former Counsel

Ten Years After Colorado’s Adverse Possession Amendment: a brief look backwards and forwards

In response to national outrage over an infamous adverse possession case in Boulder, Colorado, in which a lawyer and a judge intentionally took their neighbors’ undeveloped land through adverse possession, the Colorado legislature amended the state’s adverse possession statute (C.R.S. § 38-41-101) to make the claim significantly harder to prove.  It did this because it […]

LM
Former Associate

Wait, You Want An HOA?! Restricting Implied Common-Interest Communities

By: Neal McConomy While the butt of many jokes and a thorn in the side of some property owners, homeowners associations (“HOAs”) serve the vital function of collecting and disbursing funds to care for and maintain common areas of residential developments. Without HOAs, neighborhood open spaces, parks, and other amenities risk falling into disrepair through […]

NM
Former Associate

California Supreme Court Clarifies Deadline to File Anti-SLAPP Motions in Light of Amended Pleadings

By: Tony Carucci California’s “anti-SLAPP” (“SLAPP” is an acronym for strategic lawsuit against public participation) statute—codified at California Code of Civil Procedure section 425.16 et seq.—is the primary vehicle for defending against any action involving petitioning or free speech. The statute was designed to provide an early and fast summary judgment-like procedure to allow defendants […]

“But I didn’t know what I was signing….”

By Bobby Kethcart In real estate cases—which frequently involve long purchase agreements, loan documents, personal guarantees, deeds of trust, etc.—we’ve likely all had a client or opposing party who trots out the line that they didn’t know what they were signing, or they didn’t read or understand what they were signing, so the document shouldn’t […]

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Developers Celebrate Arizona’s Opportunity Zones

By: Patrick J. Paul President Trump’s Tax Cuts and Jobs Act passed by Congress in December included a new community development program designed to promote investment in low income urban and rural communities.  These “Opportunity Zones” provide that every Governor may nominate up to 25% of qualifying low-income Census tracts for consideration in the program […]

Withdrawal of an Admission in California May Shift Costs—Including Attorneys’ Fees—Incurred in Connection with the Withdrawal

By: Tony Carucci Under California Code of Civil Procedure section 2033.300, a court may permit a party to withdraw an admission made in response to a request for admission upon noticed motion. The court may only do so, however, “if it determines that the admission was the result of mistake, inadvertence, or excusable neglect, and […]

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Specific Performance of an Option Contract to Purchase Real Property is Barred Absent Agreement on All Material Terms

By:  Richard H. Herold On November 14, 2017, the Court of Appeals (Division 1), in Offerman v. Granada, LLC, 2017 WL 5352664, reversed a trial court order directing specific performance of an alleged option to purchase real property, holding that the alleged option was too indefinite to be specifically performed because the parties did not […]

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RH
Former Partner

California Mediation Confidentiality May Apply to Third Party “Participants” Retained to Provide Analysis

By: Tony Carucci California Evidence Code section 1119 governs the general admissibility of oral and written communications generated during the mediation process. Section 1119(a) provides that “[n]o evidence of anything said or any admission made for the purpose of, in the course of, or pursuant to, a mediation . . . is admissible or subject […]

The “Ugly” Property Next Door is Ruining My Property Value

By:  Kevin J. Parker Traditional bases for private nuisance claims include circumstances where noise, light, vibration, or odor emanating from a neighboring property harm the value of your property. Such bases can be objectively verified and quantified.  Courts in various states depart, however, on the issue of whether pure unsightliness of a neighboring property, which […]

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KP
Former Counsel

Erasing Any Doubt: Arizona FED Actions Do Not Accrue Until Formal Demand for Possession is Tendered

By:  Bob Henry Clearing up any lingering confusion, in Carrington Mortgage Services, LLC v. Woods, 767 Ariz. Adv. Rep. 4 (June 22, 2017), the Arizona Court of Appeals confirmed that residential forcible entry and detainer actions in Arizona accrue for statute of limitations purposes when a party entitled to possession makes a formal demand for […]

BH
Partner

Does Your 998 Offer to Compromise Include Attorneys’ Fees and Costs?

By: Anthony J. Carucci In California, the “prevailing party” in litigation is generally entitled to recover its costs as a matter of law. See Cal. Code Civ. Proc. § 1032. But under California Code of Civil Procedure section 998, a party may make a so-called “offer to compromise,” which can reverse the parties’ entitlement to […]

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Arizona Supreme Court Holds a Credit Bid at a Trustee’s Sale Should Not be Credited to a Title Insurer Under a Standard Lender’s Title Policy To the Extent the Bid Exceeds the Collateral’s Fair Market Value

By:  Richard H. Herold The Arizona Supreme Court recently addressed what impact, if any, a lender’s credit bid at an Arizona trustee’s sale has on an insurer’s liability under Sections 2, 7 and 9 of the standard’s lender’s title policy (“Policy”), holding in Equity Income Partners, LP v. Chicago Title Insurance Company, 241 Ariz. 334, […]

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RH
Former Partner

Green Energy Can Complicate Real Estate Foreclosures

Bob L. Olson A quick drive through almost any newer residential community in the Southwest will show that a lot of residents are embracing “Green Energy” or renewable energy by placing solar panels on their properties. While most people would agree that increasing the use of alternative energy is socially responsible, there are a number […]

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BO

Avoiding Lender Liability for Credit-Related Actions in California

By: Anthony J. Carucci Aside from general statutory prohibitions on lender discrimination, there are certain circumstances under California law in which lenders may be held liable for credit-related actions, such as negotiating or denying credit. See generally 11 Cal. Real Est. § 35:3 (explaining that the business of lending money is subject to the Unruh […]

Developer Awarded Cost of Preparing Administrative Record in CEQA Lawsuit

Lawsuits under the California Environmental Quality Act (“CEQA”) typically proceed as petitions for administrative mandamus. This means the petitioner is asking the court to review an agency’s decision and ultimately issue a mandate directing the agency to set aside its decision.  In this respect the court acts like an appellate court, reviewing the agency’s decision.  […]

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Equitable Subrogation Part Deux: Mechanic’s Lien vs. Later Bank Deed of Trust

By Kevin J. Parker https://www.swlaw.com/people/kevin_parker This post follows, almost two years to the day, Rick Erickson’s post of August 29, 2014. As noted by Rick Erickson in his August 29, 2014 post, the Arizona Supreme Court in the Weitz case (2014) had determined that equitable subrogation principles were applicable to enable an earlier-recorded mechanic’s lien […]

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KP
Former Counsel

Applying New California Rules to Your Real Estate Litigation Practice

By: Lyndsey Torp Several new California procedural rules went into effect on January 1, 2016. While we are several months into the new year, litigators may need a reminder of these new rules.  The list below summarizes several of the notable new rules. Pleading Stage New California Code of Procedure section 430.41(a)(2) mandates that the parties […]

LT
Former Senior Attorney

Nevada Supreme Court Holds that Foreclosure Of HOA Lien Extinguishes Equal Priority HOA Lien.

By: Bob L. Olson In Nevada’s master-planned communities it is common for one home to be in multiple homeowners’ associations.  In such cases there is generally a master association for the master-planned community and then sub-associations for specific developments within the master-planned community.  The liens of the master association and the sub-association have equal priority […]

BO

Eminent Domain: Be Careful What You Ask For

By:  Richard Herold and Patrick Paul The condemnation[1] of property for public works may not always be as clean and easy as the government would like.  Although local governments are often critical players in the cleanup and redevelopment of contaminated properties, contaminated property can: (1) trigger disclosure requirements; (2) lead to environmental liability, for example, […]

RH
Former Partner

Property Taxes: A Shopping Center May Not Always be a Shopping Center

By:  Rick Herold, Craig McPike & Ben Reeves In the world of real property taxes, Valuation + Classification = Assessed Valuation.  Sounds simple, right?  The County Assessor determines the first factor, valuation (subject to certain guidelines under applicable Arizona law).  The Arizona State Legislature determines the second factor, the property’s legal classification and corresponding assessment […]

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RH
Former Partner

It just got a little bit easier to enforce judgment liens

By:  Ben Reeves Last year, we posted It just got a little bit harder to enforce judgment liens, which analyzed a Court of Appeals decision that invalidated a judgment lien against third-party purchasers due to the judgment creditors’ failure to record an information statement along with the judgment.  Lewis v. Debord, 236 Ariz. 57, 335 […]

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BR
Partner

Homebuilders Welcome Recent Court Decisions

By:  Patrick Paul Arizona homebuilders will welcome with open arms two recent legal rulings of substantial impact to their industry. In the first decision, on July 28, 2015, in Sullivan v. Pulte Home Corp., No. 1 CA-CV 14-0199, the Arizona Court of Appeals held that homebuilders do not owe a duty of care to subsequent […]

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Nevada Supreme Court holds that Voluntary Payment Doctrine Prohibits a Party from Recovering Amounts Wrongly Paid to Homeowner’s Association in Order to Prevent Foreclosure

By:          Bob L. Olson On September 30,2014, we posted “Lenders Beware: the Nevada Supreme Court Holds that Foreclosures of Homeowner’s Association Liens May Extinguish First Priority Deeds of Trust” which discussed the recent decision of SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 130 Nev. Adv. Op. 75 (Sept. 18, 2014) (“SFR”).   At the […]

BO

Federal Courts to Apply More Protective State Law when Analyzing Validity of Pre-dispute Jury Trial Waivers in Diversity Jurisdiction Cases

By Anthony J. Carucci The Ninth Circuit Court of Appeals recently held that federal courts sitting in diversity jurisdiction must apply the underlying state law to determine the validity of pre-dispute jury trial waivers where the state law is more protective than the federal law. In re Cnty. of Orange, No. 14-72343, 2015 WL 1727240, […]

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Arizona Courts Lacks Authority To Stay Forcible Entry And Detainer Judgments When The Judgment Itself Is Not Pending Appeal

By: Nicholas Kunz Can a court stay the execution of a Forcible Entry and Detainer (“FED”) action when the FED judgment itself is not appealed? The Arizona Court of Appeals recently addressed this question, holding that the court did not have the authority to stay the execution of the FED judgment, because only the denial […]

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NK
Former Associate

A Purchaser Who Doesn’t Inquire May Be Teeing Up For Failure

  By: Erica Stutman Picture this:  While on the hunt for new development opportunities, you stumble across a golf course in the middle of a high-end community, and you think this would be the perfect spot for more houses, or a retail center, or a movie theater, or …oh, the possibilities are endless!  Better yet, […]

ES

California Case Requires Arbitration Despite Lack of Actual Controversy

  By:  Lyndsey A. Torp and Sean M. Sherlock For parties to litigate a contract dispute in a court of law, the parties’ disagreement must have ripened into an actual controversy presenting more than a mere academic difference of opinion.  But under a recent California Court of Appeal opinion, no actual controversy is required to […]

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Vendees’ Liens—Construction Lenders Beware!

By:  David A. Sprentall A recent Arizona Court of Appeals decision highlights a lien priority risk for secured construction lenders when the financed project fails. The problem—known as a “vendee lien”—is most likely to arise when up-front deposits are paid by buyers of units in condominiums or similar projects. The case, Rigoli v. 44 Monroe Marketing, […]

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BR
Partner

Homestead Exemption Cannot be Denied on Equitable Grounds

By Kevin J. Parker Arizona’s homestead exemption allows a person to protect from certain creditors up to $150,000 of their equity in their residence (dwelling house, condominium, or mobile home).  A.R.S. § 33-1101 et seq.  This homestead equity is exempt from non-consensual liens, for example recorded judgments against the owner.  The homestead exemption does not […]

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KP
Former Counsel

Easements Made Easier: Building Pipelines with the Power of Eminent Domain Under the Natural Gas Act

By: Richard H. Herold Any person or entity seeking to construct a natural gas pipeline and successful in obtaining a certificate of convenience and necessity from the Federal Energy Regulatory Commission may exercise the power of eminent domain to obtain easements across private property when those easements are necessary and cannot be obtained consensually (by contract) from […]

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RH
Former Partner

Colorado Supreme Court Revisits Rule Against Perpetuities

By: Ginny Olmstead   http://www.swlaw.com/attorneys/virginia_olmstead In March of this year, the Colorado Supreme Court revisited a fundamental doctrine of property law, which it described as “long cherished by law school professors and dreaded by most law students: the infamous rule against perpetuities.”  The rule applies an unusual formula to prevent property from remaining “tied up” by […]

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Seller Liability for Disclosures (or Non-Disclosures), Part 2

May 12, 2014 By:  Kevin J. Parker In our blog post dated April 29, 2013, Matthew Fischer discussed the case Lerner v. DMB Realty, LLC (Arizona Court of Appeals, November 27, 2012).  In that case, the Arizona Court of Appeals addressed, among other things, the viability of a claim wherein a buyer of residential real […]

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KP
Former Counsel

The Registrar is Changing the Game for Complaints Against Arizona Contractors

By Rick Erickson http://www.swlaw.com/attorneys/rick_erickson Sweeping changes at the Registrar of Contractors have the construction and real estate industries concerned and curious.  The Registrar recently received some poor performance reports by the Auditor General and State Ombudsmen.  As a result, the Registrar overhauled its procedures for handling complaints and adjudicating contested cases against Arizona contractors.  You […]

RE

Bona Fide Tenancies for a Term Remain Protected

By:  Julie E. Maurer A recent California Court of Appeals decision determined that the federal Protecting Tenants Against Foreclosure Act (“PTFA”) impliedly overrides state laws that provide less protection to tenants, but expressly allows states to retain the authority to enact greater protection.  The PTFA was enacted by Congress in May 2009 (Pub.L. 111-22, Div. […]

JM
Former Counsel

Bidding on State Land Trust Leases: Even the Top Revenue-Generating Bids Must be Balanced Against Qualitative “Best Use” Factors Designed to Protect the Land

By:  Richard H. Herold The Court of Appeals recently held that that the Commissioner of the State Land Trust Department properly balanced Wildearth Guardians, Inc.’s higher revenue-generating bid against “best use” qualitative factors set forth in the Arizona Administrative Code.  As a result, the appellate court affirmed the Commissioner’s decision to award a 10-year grazing […]

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RH
Former Partner

Suing a Licensed Real Estate Professional May Require You to Complete and Turn In Your Homework.

By: Cory L. Braddock A lawyer must have a good faith belief, after reasonable inquiry, that a lawsuit he files is grounded in fact and warranted by existing law.  Ariz. R. Civ. P. 11.  In other words, lawyers violate Arizona’s rules of civil procedure when they file frivolous lawsuits.  In Arizona, the legislature has, at […]

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CB

Protecting Your Project From Litigation: Limited Liability Company vs. Partnership

If you have multiple investors/owners, one of the benefits of using a Limited Liability Company (LLC) to own real property rather than using a partnership is that the LLC offers better protection of the real property from creditors of any individual part-owner (LLC member or partner).  A judgment creditor of an LLC member is limited […]

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KP
Former Counsel

Anticipating Earnest Money “Damages” – Don’t Assume It

By Bob Henry The Arizona Supreme Court issued an opinion last month in Thomas v. Montelucia Villas, LLC, 2013 Ariz. LEXIS 152 (June 14, 2013) that adds a few wrinkles to efforts by sellers in real estate transactions to retain “earnest money” from a buyer upon the buyer’s default.   While the opinion addresses issues that […]

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BH
Partner

Statutory Caveat Emptor Survives…or Does It?

By:  Matthew P. Fischer Arizona has codified the concept of caveat emptor (i.e., buyer beware) for three particular circumstances.  Pursuant to A.R.S. § 32-2156, real property sellers are not obligated to disclose:  (1) deaths or felonies that have occurred on the premises; (2) prior occupancy by someone with a non-communicable disease; and (3) nearby sex […]