Where a civil judgment for fraud based on misrepresentation of the square footage of a residence was entered in favor of a buyer against his real estate broker the broker’s real estate license may not be suspended by the Department of Real Estate unless the judgment is based on “clear and convincing” proof of fraud. Grubb Company Inc. v. Department of Real Estate 194 CA 4th 1494 (2011).
Archive for the ‘Real Estate’ Category
DRE TAKES ACTION AGAINST BROKER FOUND LIABLE FOR FRAUD IN MISREPRESENTING THE SQUARE FOOTAGE OF A RESIDENCE
Tuesday, July 12th, 2011MARS COMPLIANCE FOR REAL ESTATE AGENTS
Tuesday, March 29th, 2011Any real estate agent who negotiates short sales with lenders or promotes their services as a way to help consumers avoid foreclosure is covered by the new Federal Mortgage Assistance Relief Services (“MARS”) rules, and must comply with all requirements regarding mandatory disclosures, misrepresentations and the prohibition against collection of advance fees. [16 CFR 322 et. seq.]
WHEN IS A LOAN MODIFICATION A BAD IDEA?
Thursday, February 24th, 2011Click the Link Below to Watch the Discussion About Loan Modifications.
When Is A Loan Modification A Bad Idea?
This is a discussion about loan modifications between realtor DeVonna Meyer and real estate attorney Mark Strombotne.
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You should consult legal counsel to evaluate this legal precedent in the context of your specific facts. The distribution of Legal Update does not by itself create an attorney-client relationship with the viewer.
A “NONREFUNDABLE” DEPOSIT NEVER IS
Thursday, February 17th, 2011A deposit does not become “non-refundable” merely by labeling it as such. To keep a defaulting buyer’s deposit, the seller must satisfy the statutory requirements for liquidated damages. Kuish v. Smith (2010) 181 CA4th 1419.
New Law Protects Homeowners from Liability to the 1st Lienholder After a Short Sale – SB 931
Wednesday, February 9th, 2011SB931
HOMEOWNER HAS NO RIGHT TO SUE LENDER WHO FORECLOSES WITHOUT COMPLYING WITH MANDATORY 90-DAY DELAY (CIVIL CODE §2923.52 et seq)
Wednesday, February 2nd, 2011Private individuals do not have the right to sue a non-complying lender or seek the invalidation of a foreclosure sale even though the lender failed to comply with Civil Code §§2923.52 which requires certain lenders to delay foreclosure proceedings for 90 days to allow the borrower time to seek loan modification. Only regulatory agencies possess the authority to enforce lender compliance. If the foreclosure sale has already occurred, the lender’s noncompliance with §§2923.52 or 53 does not affect the validity of the foreclosure sale. Vuki v. Superior Court (2010) 189 CA4th 791.
LISTING AGENT HAS LEGAL DUTY TO DISCLOSE SHORT SALE STATUS TO BUYER
Monday, November 1st, 2010When a real estate agent is aware that the amount of existing mortgage liens exceeds the sales price of a residential property, such that the property can only be sold by short sale, the agent has a duty to disclose this state of affairs to the buyer, so that the buyer can inquire further and evaluate whether to risk entering into a transaction with a substantial risk of failure. Holmes v. Summer (2010) 188 CA4th 1510. (more…)
NEW LAW PROTECTS HOMEOWNERS FROM LIABILITY AFTER A SHORT SALE FOR THE UNPAID LOAN BALANCE ON THE FIRST DEED OF TRUST
Wednesday, October 13th, 2010Beginning January 1, 2011, any first trust deed lender who approves a short sale of a residential real property, will be prohibited by law from collecting the unpaid loan deficiency after the sale.
ADVISORY: THIS LAW WAS AMENDED ON JULY 15, 2012. SEE THE SLF LEGAL UPDATE DATED JULY 26, 2011.
THE SOLE REMEDY FOR A LENDER’S VIOLATION OF CIVIL CODE §2923.5 (FAILURE TO EXPLORE FORECLOSURE ALTERNATIVES) IS POSTPONEMENT OF THE FORECLOSURE SALE
Tuesday, August 17th, 2010
The only remedy available to a homeowner for the lender’s violation of its statutory obligation to explore options to prevent foreclosure, is postponement of the impending foreclosure sale. However, if the foreclosure sale has already occurred, the lender’s noncompliance does not affect the validity of the foreclosure sale. Mabry v. Superior Court (2010) 185 CA4th 208. (more…)
FORECLOSURE FORBEARANCE AGREEMENT MUST BE IN WRITING TO BE ENFORCEABLE
Sunday, July 18th, 2010On October 9, 2008 the California Court of Appeal ruled that a lender’s oral promise not to foreclose on a homeowner was not enforceable unless it was put in writing and signed by the lender. Secrest v. Security National Mortgage Loan Trust 167 Cal. App. 4th 544 (2008)
BROKER HAS FIDUCIARY DUTY TO DISCLOSE TO THEIR CLIENT, MATERIAL INFORMATION KNOWN TO ANY OF THE BROKER’S AGENTS
Sunday, July 18th, 2010The California Court of Appeal for the Second District on November 1, 2007 ruled that a real estate broker has a fiduciary duty to disclose material information to its client, regardless of which salesperson in the broker’s office has the information. Michel v. Palo Verdes Network Group 67 Cal.Rptr. 3d 797 (2007). (more…)
ESCROW AGENT’S DUTY TO COMPLY WITH LENDER’S INSTRUCTIONS FOR THE DISBURSEMENT OF FUNDS CONTINUES EVEN AFTER THE CLOSE OF ESCROW
Saturday, July 17th, 2010An escrow agent’s duty to disclose the distribution of loan monies to the lender, as agreed in the closing instructions, does not end upon close of escrow but continues until all monies have been distributed and the loans are closed. Plaza Home Mortgage, Inc. v. North American Title Company, Inc. 184 CA4th 130 (2010). (more…)
CONTRACT LANGUAGE ADVISING BUYER TO INVESTIGATE CONDITION OF PROPERTY BEFORE RELYING UPON AGENT’S STATEMENTS DOES NOT PROTECT AGENT FROM LIABILITY
Saturday, June 26th, 2010SUMMARY: The California Court of Appeal for the Fourth District on January 24, 2007 ruled that a real estate broker can be liable for fraud by telling the buyers that the County told him the property could be subdivided when in fact the property could not be subdivided. Manderville v. PCG&S Group Inc. 146 CA4th 1486 (2007) (more…)
HOME MORTGAGE LENDER MAY BE LIABLE TO BORROWER FOR MARK-UP OF LOAN TRANSACTION COSTS
Saturday, June 26th, 2010The California Court of Appeal for the Second District ruled that when home mortgage lenders charged borrowers a marked-up price for the cost of services provided by others, such as underwriting services, tax services and wire transfer fees, then the lenders can be liable for violations of state and federal statutory protections. McKell v. Washington Mutual Inc. 142 Cal.App. 4th 1457 (2006). (more…)
FAILURE TO MEDIATE, WHEN REQUIRED BY CONTRACT, CAUSES THE PREVAILING PARTY TO FORFEIT RECOVERY OF ATTORNEY FEES
Saturday, June 26th, 2010The California Court of Appeal for the Fourth District ruled that the standard form CAR residential purchase agreement used in California which requires the buyer and seller to mediate as a condition to an award of attorney fees in subsequent litigation is enforceable. Consequently a prevailing party who failed to mediate prior to commencing litigation was denied recovery of $158,000 in attorney fees. Frei v. Davey 124 Cal App. 4th 1506 (2005) (more…)
REAL ESTATE AGENTS SHOULD NOT GET FINANCIALLY INVOLVED WITH THEIR CLIENTS
Wednesday, December 6th, 2006SUMMARY: The California Court of Appeal for the Second District on September 21, 2006 confirmed a judgment against a real estate broker who originally helped a client with bad credit qualify for a loan to purchase a condominium but subsequently took over ownership of the property when the client did not make the monthly payments. Warren v. Merrill 49 Cal Rptr 3d 122 (2006). (more…)
A NEIGHBOR’S CONTINUED USE OF A BANK’S PARKING LOT CAN BECOME A PERMANENT RIGHT OF WAY BY PRESCRIPTIVE EASEMENT
Saturday, August 14th, 2004The California Court of Appeal for the 2nd District in San Luis Obispo County ruled on August 5, 2004 in the case of Felgenhauer v. Soni 17 Cal. Rptr. 3d. 135 (2004), that the owner of a restaurant in Paso Robles who had deliveries made to his back door by crossing over the adjacent bank’s parking lot for more than five years acquired a prescriptive easement which could not thereafter be blocked by the bank. (more…)
SELLER’S FAILURE TO DELIVER TRANSFER DISCLOSURE STATEMENT TO BUYER GIVES BUYER THE RIGHT TO CANCEL THE PURCHASE EVEN THOUGH BUYER INTENDS TO DEMOLISH THE BUILDING
Monday, July 14th, 2003The California Court of Appeal in the 4th District ruled on July 7, 2003 that a seller’s failure to deliver a TDS disclosure statement gave the buyer the legal right to cancel the purchase even though buyer was unconcerned with the condition of the residence because buyer was purchasing the property as-is, and intended to demolish the residence and replace it with a commercial building. Realmuto v. Gagnard 110 CA4th 193 (2003). (more…)
A BUYER’S CLAIM AGAINST A HOME INSPECTOR ACCRUES WHEN THE BUYER DISCOVERS OR SHOULD HAVE DISCOVERED THE INSPECTOR’S NEGLIGENCE
Friday, March 14th, 2003SUMMARY: The California Court of Appeal in Los Angeles ruled on March 17, 2003 that a home inspector could not limit by contract the statute of limitations applicable to a claim against the inspector, to one year after the inspection. Rather the applicable statute of limitations does not accrue until the home buyer discovers or should have discovered the inspector’s negligence. Moreno v. Sanchez 106 CA4th 1315 (2003). (more…)
NEW HOME PURCHASE CONTRACTS OF “ADHESION” ARE NOT ENFORCEABLE
Wednesday, August 14th, 2002The California Court of Appeal in San Diego ruled on August 2, 2002 that a residential construction company could not enforce a purchase contract which required home buyers to waive their right to a trial of construction defect claims, or waive their right to a jury, or waive their claims for punitive damages. Pardee Construction Co. v. Superior Court 100 Cal.App.4th 1081 (2002) (more…)
PUT TEETH IN YOUR SETTLEMENT AGREEMENTS TO END LEGAL DISPUTES IN ONE LAWSUIT INSTEAD OF MANY
Wednesday, April 10th, 2002The California Court of Appeal in Los Angeles ruled on April 4, 2002 that parties to a settlement agreement which did not request the court to retain jurisdiction over the case, had to start a new lawsuit to enforce breaches of the settlement agreement. Wackeen v. Malis 97 CA4th 429 (2002). (more…)
THERE IS NO APPEAL OF AN ERRONEOUS ARBITRATION AWARD
Thursday, March 14th, 2002The California Court of Appeal ruled on March 21, 2002 that an arbitration award of a real estate contract dispute will not be reversed on appeal even if it contains significant legal or factual errors which result in substantial injustice. Harris v. Sandro 96 Cal.App.4th 1310 (2002). (more…)