By Glen Hansen

In Robert Ekstrom v. Marquesa at Monarch Beach Homeowners Association (2008) 168 Cal.App.4th 1111, the Court of Appeal, Fourth Appellate District, emphasized that boards of directors of homeowners associations do not have the discretion to ignore the express requirements of the conditions, covenants and restrictions (“CC&Rs”) for the development, despite the “judicial deference rule” adopted by the California Supreme Court in Lamden v. La Jolla Shores Clubdominium Homeowner’s Assn. (1999) 21 Cal.4th 249.
Continue Reading Court to Homeowner Association Board: No Judicial Deference Just Because You Like Palm Trees

By Glen Hansen

In T.O. IX, LLC v. Superior Court (2008) 165 Cal.App.4th 140, a contractor built a street through a nine-home subdivision developed by the property owners. The contractor alleged that he had not been paid. The contractor then recorded nine individual mechanic’s liens against each home; or, as the court summarized: “nine separate liens, at the full amount each, to secure the contractor’s right to be paid once.” The property owners applied ex parte for an order permitting them to release the parcels from the nine mechanic’s liens by posting a single surety bond in an amount equal to one and one-half times the total amount of the contractor’s claim, as provided under Civil Code section 3143. The trial court denied the owners’ application. The Court of Appeal, Second Appellate District, reversed.
Continue Reading “Unlike A Cat, The Mechanic’s Lien Here Has One Life, Not Nine,” Says Court of Appeal

By William W. Abbott

A byproduct of modern planning is the proliferation of property owner associations, mostly centered on residential developments. At the time of formation however, associations are subject to minimal oversight by the State of California, and then only for residential development projects subject to review by the Department of Real Estate. One of the challenges facing associations is continued active participation by the owners in association matters. For associations facing apathetic owners, it may be difficult to obtain the necessary level of votes to take actions on behalf of the association, and in situations in which association documents require a super-majority vote to pass resolutions for certain actions, a stalemate may readily occur. In 1985, the legislature, recognizing the important role that associations play, enacted statutory provisions which allowed interested parties to file a court action to reduce the required voting percentage in compelling circumstances (Civ. Code § 1356). The recent case of Mission Shores Association v. Pheil (September 5, 2008) 2008 Cal.App.Lexis 1395 illustrates how this works in real life.
Continue Reading Appellate Court Grants Request to Reduce Super Majority Vote Requirement Codified in Subdivision CC&Rs

By Rob Hofmann

This mid-summer review of real estate cases covers three interesting matters of potentially broad application. The first case Goldstein v. Barak Construction, deals with the precarious position of unlicensed contractors. The second, Lange v. Schilling, reinforces the significance of the mandatory medication provision of the standard CAR purchase agreement. Finally, Steiner v. Thexton, wrestles with the penultimate flexible purchase agreement, and how a buyer may lose the deal absent adequate consideration.
Continue Reading Abbott & Kindermann Mid-Summer Real Estate Review

By Rob Hofmann

On May 28, 2008, the Third Appellate District for the Court of Appeal hammered home that technical form over substance rules in real property purchase transactions, irrespective of the parties’ original intent. At issue was a run of the mill purchase and sale transaction, overseen by attorneys on both sides, which granted the buyer a due diligence period to inspect the property and the ability to cancel the transaction if the buyer concluded the property ultimately did not meet its specifications. In this instance, however, the seller chose to cancel the deal during the due diligence period despite the jilted buyer having already spent some $60,000 obtaining a parcel split and related entitlements. The court not only rejected the buyer’s request to enforce the contract but also required the out-of-luck buyer to pay the seller’s $80,000-plus in attorneys’ fees incurred in defense of the buyer’s challenge of the deal cancelation. Steiner v. Thexton (2008) 163 Cal. App.4^th 359.Continue Reading Unsupported Option or Purchase Agreements: A Cautionary Tale

By Rob Hofmann

Plaintiffs Amanda Goldstein and Eric Mizrahi contracted with Ami Weisz and ‘his company’ Barak Construction (“Defendants”) to build a new garage and related remodeling at the projected cost of $363,000. Neither Defendant was a licensed contractor at the time the parties entered into the contract nor when work on the project commenced. Although it is unclear whether Plaintiffs were initially aware of Defendants’ licensure status, Defendants concede they were not licensed until some three months into the project. Plaintiffs contend that Defendants subsequently abandoned the project prior to completion and with material defects despite having allegedly already been paid $362,660.50.Continue Reading Contractor Subject to Prejudgment Attachment and Not Entitled to Any Compensation When Project Commenced Before Licensure