Shotgun Eviction – Bring the Police

Posted by Lee Sterling | Posted in Landlord-Tenant, Miscellaneous, Real Estate | Posted on 12-08-2013

  Here’s one way you shouldn’t evict a tenant.

Stan Pate owned a shopping center in Tuscaloosa, Alabama, and one of his tenants, Santa Fe Cattle Co. restaurant,    closed, and the parent company filed for bankruptcy protection. The lease was terminated on September 29, 2009,  and the next day employees of the company showed up at the restaurant in the Center with several police officers to  remove leased equipment. One of the employees alleged that Pate pointed a shotgun at him, which Pate denied. He  was charged with “menacing’ and convicted of a misdemeanor. He appealed the conviction, arguing that  he had lien  rights on the property being removed, and had the right to prevent others from removing the property. The appellate  decision indicated that it was inconclusive that Pate had a landlord lien on the contents of the restaurant, and the  conviction was upheld by the Alabama Court of Criminal Appeals.  Pate plans to appeal to the Alabama Supreme Court. Whether his conviction is overturned or not, this episode has cost him time and money and, undoubtedly, anguish. During his appeal the National Rifle Association Defense Fund filed a brief with the court arguing that “Pate had a right to protect his personal property because police had no duty to protect him or his property.”

The lesson for tenants in this episode is that if you’re going to enter property after your lease has been terminated BRING THE POLICE WITH YOU!

Tenants – Who’s Fixture Is It? Check Your Lease!

Posted by Lee Sterling | Posted in Economics, Landlord-Tenant, Legal, Miscellaneous, Negotiation, Real Estate | Posted on 08-06-2012

Did your tenant representative  reminded you to review what happens to your fixtures at the end of the initial term        of your lease, and what happens if you renew the lease? And did your representative describe what might be a trade fixture and what might be a fixture? California has described fixtures as “a fixture is a thing that is so attached to realty as to be considered in law a part of the realty itself,” and a trade fixture as a “[fixtures] placed on leased premises for the purposes of trade.”  Absent specific language  in the lease, a tenant has no right to remove fixtures at the end of the lease term, but MAY remove trade fixtures during the term (and for a reasonable time after the end of the term) “if the removal can be effected without injury to the premises…”

 Another complication arises if you holdover, renew or extend your lease. California has determined that if you holdover, that means staying in the premises after the term of your lease has ended, absent specific language to the contrary, the fixtures AND the trade fixtures become the property of the landlord.  And if there’s nothing in the renewal of the lease that allows you to remove the fixtures or trade fixtures that were installed during the initial term you may have lost the right to remove them at the end of the renewal term.

What’s obvious is that a seemingly simple provision in a lease may be more complicated than the average tenant may understand.  That’s why you need to  make sure that you review your lease carefully, get good advice from your tenant representative, and have your lease reviewed by a competent California real estate attorney. There are lots more of these “gotcha” clauses in a typical “standard” lease.

 

Thoughts On Our Health Care System

Posted by Lee Sterling | Posted in Economics, Miscellaneous, Uncategorized | Posted on 26-03-2012

Lost in all the hyperbole of the health care debate, I think, is the fact that our health care system is not very good when compared to the health care systems of other industrialized nations. Just a quick search on the Internet shows that we rank poorly on costs AND on quality of care. Here are two charts from Wikipedia. One that show how our costs compare to the costs in other nations in the industrialized world and the second one shows that our infant mortality rate is higher than that of other industrialized nations, all of whom provide some kind of universal health care system to their citizens.

 

File:Total health expenditure per capita, US Dollars PPP.png

 

And, if you really want to get perturbed, check out the analysis at the World Health Organization , which indicates that even China is doing a better job of health care than the U.S.

Whether you’re for or against RomneyCare or ObamaCare doesn’t matter. What does matter is that we need to find a way to improve our health care system and to contain costs as other countries have done while providing better care.

Employee Entitlements

Posted by Lee Sterling | Posted in Economics, Industrial, Legal, Miscellaneous, Negotiation, Office, Real Estate | Posted on 23-03-2012

Do you have employees? Have you discussed the issues described in the attached video? I got this from my friend, Bill Marvin, The Restuarant Doctor:

An Amazing World Clock

Posted by Lee Sterling | Posted in Miscellaneous, Technology | Posted on 23-08-2010

World Clock Pix My friend, Hank Jordan, an author and writer of copy for businesses [ed. note: check out his website: JordanAssociates], sent me a link to an amazing world clock. It not only tells you the time in various cities and time zones, but it also has a running total of the national debt (currently $42,963 per person in the U.S., and $120,209 per taxpayer).

There are  8 main sections of the clock: World Time; Population; Death; Illness; Environment; US Crimes, Food; and a 9th called More.  Checking out the Population section makes one realize that of the 6.8 billion people in the world almost 36% live in China and India! You can discover that Cardiovascular diseases, so far in 2010, account for almost 11 Million deaths, approximately 29% of the total. A startling 34 million people are living with HIV. Take a look at the Environment section and see how much forest land were losing. It’s disheartening. According to the Energy section, we have 13,872 until our oil id depleted. I was startled to see that in 2010, so far, the identity of almost 61 million U.S. residents has been stolen.

Did you know that more ducks are slaughtered in the U.S. than beef? Can you guess what it the most slaughtered animal in the U.S. without checking the Food section?

Take a few moments and check out this interesting site, and pass this on to your friends: world clock.

If you live in a home subject to a Homeowners Association (HOA) you may be interested in checking out my recent article on what happened to some owners when they tried to defy their HOA architectural control provisions: www.carlsbadrealtynews.com

Who Pays When Your Customer Gets Hurt and Sues? You Or The Landlord?

Posted by Lee Sterling | Posted in Economics, Landlord-Tenant, Legal, Miscellaneous, Real Estate | Posted on 06-03-2010

slipandfall

You have leased space in a Carlsbad office/warehouse building, and your lease provides that you are responsible for interior maintenance of the premises and the landlord is responsible for the roof, exterior walls etc.

The Accident

Last year a customer walked into your office, and slipped in a puddle of water caused by a roof leak that you had complained about to the landlord, which had not been repaired at the time of the accident. The customer suffered a broken back, had major medical bills, loss of work, and possible long-term disability.

The lawsuit

Guess who gets sued!  Right, both you and the landlord. Fortunately, your insurance company settles with the accident victim, and your insurance company proceeds with the claim against the landlord. It becomes a battle between your insurance company and his insurance company. Your insurance company is claiming that the landlord should pay your insurance company for the money it paid out to the accident victim to settle the matter.

The landlord argues that the lease required you to obtain insurance, which you did, and that the Indemnification clause of the lease meant that you had to cover any damages resulting from an injury in your leased premises.

The Indemnification

So you look at your lease, and you find the indemnification clause that reads: “Tenant hereby indemnifies and agrees to save harmless landlord from and against all claims, unless such claims are caused solely (my emphasis added) by the acts or omissions of landlord, which either: (1) arise from or are in connection with the possession, use, occupation, management, repair, maintenance, or control of the Premises or any portion thereof; (2) arises from or are in connection with any act or omission of Tenant’s or Tenant’s agents; or (3) result from any default, breach, violation or non-performance of this lease or any provision of this lease by tenant.

Your insurance company’s attorney argues that the puddle on the floor was caused by the roof leak that had not been repaired after your reported the problem, and that the landlord was liable.  The landlord’s attorney argues that there was a roof leak, but you failed to maintain the premises properly and that you should have dried up the puddle so the landlord was not solely responsible for the accident.

Who wins?

You be the judge. The lesson is that one word, out of the thousands, in the lease can dramatically affect your rights and obligations. Be sure you have a knowledgeable real estate agent helping guide you, and have your lease reviewed by your real estate attorney before signing it!

A is for Apple And Also Attornment

Posted by Lee Sterling | Posted in Carlsbad, Encinitas, Landlord-Tenant, Legal, Miscellaneous, Negotiation, North County, Oceanside, Real Estate, San Diego | Posted on 30-10-2009

leaseform

We now get to the A of SNDAs (Subordination, Non-disturbance, and Attornment Agreements in leases.) First a brief recap of Subordination and Non-Disturbance. You may remember from our previous articles that if you’re a tenant, and you’ve agreed to subordinate your interest in the lease to any mortgage, trust deed of other security device, and the holder of one of those security devices forecloses, your lease may be terminated. Leases usually provide for that subordination to security devises even if they are created after the lease commences. The non-disturbance clause protects you in the event of a foreclosure (or in the event the property is sold to another owner) by providing that if you’re not in default you’ll be able to keep your lease in effect.

The attornment clause stems from the old feudal law that there was a personal obligation between the lord of the manor and his tenants, and that those obligations were reciprocal. The consent of the lord was required for a sale of the tenant’s interest, and the consent of the tenant was required for alienation (sale/transfer) of the reversion or remainder interest in the property. Thus, the lord could not alienate his reversion or remainder interest without the consent of the tenant. The consent was called an attornment. The necessity for an attornment was abolished before the American Revolution by the English Statute of Anne. In California, the common law rule eliminating the requirement of attornment has been confirmed by statute. However, just to be sure, leases contain an attornment clause that provides that if title to the property is transferred by the Lessor or if title is acquired through foreclosure or termination of a Security Device the tenant will attorn to the new owner.

The language of the SNDA in each lease has to be examined carefully because there are differences that may result from the specific language of the three inter-related clauses. There are some interesting California cases involving the interpretation of SNDAs. Be sure to have the lease reviewed by California counsel before signing any lease.

Lee Sterling was a real estate lawyer in Colorado for 27 years. He is not licensed as an attorney in California. He does have a California real estate license # 01319489.

What To Do When Your Landlord Goes Bankrupt

Posted by Lee Sterling | Posted in Economics, Landlord-Tenant, Legal, Miscellaneous, Real Estate | Posted on 23-04-2009

bankruptcyGeneral Growth, the owner or manager of more than 200 malls in 44 states, which also owns office buildings and is involved in the management and development of master planned communities, filed the LARGEST real estate bankruptcy in U.S. history. So, what happens to its thousands of tenants in those malls and office buildings?

The bankruptcy code (Code) allows the debtor-in-possession (the landlord, for example) or the trustee of the bankrupt estate (hereinafter we’ll use Trustee to indicate either) to accept or reject executory contracts and unexpired leases (Sec. 365). As a result, the Trustee will usually affirm leases that are at or above market rent and reject those that are below market rent. Of course, the lessee of a below market rent would like to make sure it continues to have the right to occupy that space, and the lessee may want to retain the space even if it’s at market rent because of significant improvements the lessee may have made or the cost of moving may be prohibitive. Fortunately, if the lease is rejected, Section 365 provides that the lessee’s possessory rights are protected. However, the Trustee may be relieved of other provisions of the lease, such as the duty to provide services to the lessee.

What if the Trustee wants to sell the property that you have leased? Section 363 of the Code allows the Trustee to sell the real property “free and clear” of any “interest,” in the property, and a lease has been held to be an “interest.” One case, in the Seventh Judicial Circuit, with its particular facts, has held that the right of the Trustee to sell the property free and clear of the lease under 363 of the Code trumps the rights under section 365 of the Code that gives the lessee the continued right to possession. The lessee, for some reason, had not objected to the sale; perhaps counting on the provisions of Section 365. The lessee lost the possessory rights to a warehouse they had built on the bankrupt’s property. In the First Circuit, in a different case, where the lessee had objected to the sale, the Court held that the lessee’s right to retain possession was not trumped by Section 363! If you’d like more information, an interesting discussion of the cases can be found at: http://is.gd/u8Sm and http://is.gd/u8qA

As soon as you hear that your landlord has filed bankruptcy or is contemplating filing bankruptcy, immediately contact competent bankruptcy counsel to protect your rights!

Did You Know?

Posted by Lee Sterling | Posted in Economics, Miscellaneous | Posted on 27-03-2009

I received this video from a long-time friend from high school days. It was so interesting that I wanted to pass it on to my friends here in Carlsbad and Encinitas: