tag:blogger.com,1999:blog-28228370193072269242024-02-08T02:38:31.489-08:00CARealEstateLawThis blog will address issues of commercial real estate (law, development, entitlement and marketing) and business (mergers and acquisition, succession, development) with interspersed observations on parenthood, marriage and life.Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-2822837019307226924.post-54974964385252611582019-11-15T09:32:00.002-08:002019-11-15T09:32:49.092-08:00New CA notary formPlease see the following for the new CA notary form: <a href="https://notary.cdn.sos.ca.gov/forms/notary-handbook-2019.pdf" style="font-family: "Times New Roman"; font-size: 14px;">https://notary.cdn.sos.ca.gov/forms/notary-handbook-2019.pdf</a><span style="font-family: Times New Roman;"><span style="font-size: 14px;"> (page 10). Recorders may reject your recorded documents if they notary is not in the current format.</span></span>Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com0tag:blogger.com,1999:blog-2822837019307226924.post-12481043040324305942019-09-08T17:40:00.002-07:002022-09-22T15:31:57.370-07:00Title Policy Endorsements<div style="-webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; caret-color: rgb(0, 0, 0); color: black; font-family: "Times New Roman", serif; font-size: medium; font-style: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; margin: 0in 0in 0.0001pt; orphans: auto; text-align: justify; text-decoration: none; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px;">
<span style="color: black;">This is a wonderful free resource for title insurance endorsements:<o:p></o:p></span></div>
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<span style="color: black;">https://ncsmarketing.firstam.com/endorsement-guide-alta/?utm_source=iC&utm_medium=email&utm_campaign=e-guide&utm_content=play<o:p></o:p></span></div>
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<span style="color: black;">I have often stated to clients that my 30+ years in real estate has taught me that real estate law is what the title company says it is. This of course, is hyperbole, but it’s not too far off the mark. The fact of the matter is that transactions real property loan, sale, long-term lease, joint venture transactions, often require a title insurance policy of some sort. Also, the price of title insurance is, in my opinion, a great value. A title company will insure against specific losses for a price lower than it would take for an attorney or other professional to simply assess the risks without providing any insurance.<o:p></o:p></span></div>
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<span style="color: black;">Title insurance is just that, insurance. Insurance is an assessment of risk by the insurer and assumption of that risk for a price, the insurance premium. Assessment of risk/premium is a judgment call. Not all insurers will see it the same way, and rarely are things set in stone. One title insurance underwriter may see a risk one way, but another one sees it a different way. You can persuade an underwriter to undertake a risk that may be out of the ordinary with a good argument backed by legal authority, but ultimately it is a judgment call. Also, maintaining a good relationship with underwriters from several of the major title insurers is very important. Underwriters within a certain company are unlikely to overrule each other, and sometimes the best argument and persuasion fails. In that case, you need to pitch it to a different underwriter at a different company. Even though there are a lot of different title companies out there, according to The American Land Title Association, most of them are owned or underwritten by the top 4, Fidelity, First American, Old Republic and Stewart.<o:p></o:p></span></div>
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<strong><span style="color: #333333; font-weight: normal;">“</span><span style="color: #333333;">Family Market Share</span></strong><span class="apple-converted-space"><b><span style="color: #333333;"> </span></b></span><span style="color: #333333;">(85.3%)<o:p></o:p></span></div>
<ul style="-webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; box-sizing: border-box; caret-color: rgb(51, 51, 51); color: black; font-family: -webkit-standard; font-style: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; margin-bottom: 0in; orphans: auto; text-align: start; text-decoration: none; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px;" type="disc">
<li class="MsoNormal" style="box-sizing: border-box; color: #333333; margin-bottom: 4.5pt; mso-list: l1 level1 lfo1; mso-margin-top-alt: auto; tab-stops: list .5in;">Fidelity, 33.3%<o:p></o:p></li>
<li class="MsoNormal" style="box-sizing: border-box; color: #333333; margin-bottom: 4.5pt; mso-list: l1 level1 lfo1; mso-margin-top-alt: auto; tab-stops: list .5in;">First American, 26.2%<o:p></o:p></li>
<li class="MsoNormal" style="box-sizing: border-box; color: #333333; margin-bottom: 4.5pt; mso-list: l1 level1 lfo1; mso-margin-top-alt: auto; tab-stops: list .5in;">Old Republic Family, 15.0%<o:p></o:p></li>
<li class="MsoNormal" style="box-sizing: border-box; color: #333333; margin-bottom: 4.5pt; mso-list: l1 level1 lfo1; mso-margin-top-alt: auto; tab-stops: list .5in;">Stewart Family, 10.8%</li>
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<strong style="box-sizing: border-box;"><span style="color: #333333;">Independent Companies</span></strong><span class="apple-converted-space"><span style="color: #333333;"> </span></span><span style="color: #333333;">(14.7%)<o:p></o:p></span></div>
<ul style="-webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; box-sizing: border-box; caret-color: rgb(51, 51, 51); color: black; font-family: -webkit-standard; font-style: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; margin-bottom: 0in; orphans: auto; text-align: start; text-decoration: none; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px;" type="disc">
<li class="MsoNormal" style="box-sizing: border-box; color: #333333; margin-bottom: 4.5pt; mso-list: l0 level1 lfo2; mso-margin-top-alt: auto; tab-stops: list .5in;">Westcor Land Title Insurance Co., 3.4%<o:p></o:p></li>
<li class="MsoNormal" style="box-sizing: border-box; color: #333333; margin-bottom: 4.5pt; mso-list: l0 level1 lfo2; mso-margin-top-alt: auto; tab-stops: list .5in;">WFG National Title Insurance Co., 2.5%<o:p></o:p></li>
<li class="MsoNormal" style="box-sizing: border-box; color: #333333; margin-bottom: 4.5pt; mso-list: l0 level1 lfo2; mso-margin-top-alt: auto; tab-stops: list .5in;">Title Resources Guaranty Co., 2.2%<o:p></o:p></li>
<li class="MsoNormal" style="box-sizing: border-box; color: #333333; margin-bottom: 4.5pt; mso-list: l0 level1 lfo2; mso-margin-top-alt: auto; tab-stops: list .5in;">North American Title Insurance Co., 1.7%<o:p></o:p></li>
<li class="MsoNormal" style="box-sizing: border-box; color: #333333; margin-bottom: 4.5pt; mso-list: l0 level1 lfo2; mso-margin-top-alt: auto; tab-stops: list .5in;">Alliant National Title Insurance Co., 0.8%”<o:p></o:p></li>
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<span style="color: black;">Source: https://www.alta.org/news/news.cfm?20180327-2017-Title-Premium-Volume-Up-33-Percent-from-Prior-Year<o:p></o:p></span></div>
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<span style="color: black;">The link provided at the beginning of this article is to a free guide that focuses on “endorsements.” Endorsements are special coverage above and beyond the standard title insurance policy. With prices like free, $100, $300 to 10% over the standard policy, these endorsements are extremely important and valuable. They can reduce the risks of a transaction to a buyer or lender and can even save deals. For example, if a sale negotiation were to get hung up on the point of whether an existing structure could be required to be removed because of recorded CC&Rs (covenants, conditions and restrictions), the buyer wouldn’t want to purchase a property and assume that risk. Likewise, the seller wouldn’t want to indemnify the buyer against that possibility. Sellers want to take their money and forget the property. Rarely do they want to be called up to solve or pay for a problem with a property they sold. Enter the title company who, with an ALTA 9.2-06 endorsement would insure: “loss or damage sustained by the Insured by reason of...Enforced removal of an Improvement as a result of a violation, at Date of Policy, of a building setback line shown on a plat of subdivision recorded or filed in the Public Records, unless an exception in Schedule B of the policy identifies the violation...” There are other items covered and limitations to this coverage, but you can see how the title company can solve a problem which neither a buyer nor seller could or would be willing to solve on their own. That’s value added!!! Many title officers will work cooperatively with the attorneys, brokers and customers who they interact with, and brokers, attorneys and other professionals who have working knowledge of title insurance can provide real value to their clients. I often have an idea of what I want with respect to title insurance and endorsements. For example, an owner’s policy with an ALTA 9.2-06 endorsement, but even in those situations, I often will ask the title officer an open-ended question, like, what other coverage or endorsements would you suggest for a transaction like this. This gets them out of the “yes” or “no” mode of my specific request and invites them to become a creative member of the team. Speaking of team members, if you need a referral to a title company or title representative, just let me know. I have worked with all of the major companies over the years, and development of strong relationships with title and escrow officers is a must for anyone in the real estate business. </span><span style="font-family: Times, Times New Roman, serif;"> I will share with you one special member of my team, Erin Graeber. She is a title rep. for First American Title Company who I have worked with for probably 20 years, even when she was at another company. She is a problem solver and is my go to person for title issues. She can be reached at: </span><a href="http://egraeberbougie-atsign-firstam.com/">egraeberbougie-ATSIGN-firstam.com</a> and 909-240-3268. Of course, there are matters which title companies can’t help with, i.e. individualized legal help. For that you need to consult with your own attorney, but good teams will lead to better results for you and your clients.<br />
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<span style="color: black;"><span style="background-color: #fff2cc; color: #29303b; font-family: "times" , "times new roman" , serif;">Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.</span></span></div>
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Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com0tag:blogger.com,1999:blog-2822837019307226924.post-1547413480571340522014-10-07T13:10:00.001-07:002015-07-13T09:32:38.176-07:00No more "privacy" when it comes to transfer tax in CA<div class="MsoNormal" style="margin-bottom: 15pt; text-align: justify;">
<span style="background-color: #fff2cc; font-family: Times, Times New Roman, serif;"><span style="color: #262626;">The custom and standard in
commercial real estate in California is to have the deed state something like:
"In accordance with Section 111932 of the California Revenue and Taxation
Code, Grantor has declared the amount of the transfer tax which is due, DTT not
of public record." This makes it so that the purchase price cannot
be computed from the amount of the transfer tax paid. The formula for
transfer tax in California is: $.55 per $500 of purchase price. The
purchase price is rounded to the nearest $500, then divided by $500, then multiplied
by $.55 to compute the tax amount. When the parties desire NOT to have
this purchase price made public, they include the "non-public"
election mentioned above. Starting January 1, 2015, this option is no
longer available meaning that all deeds will show the transfer tax and the
public will be able to compute the purchase price based upon the above formula.
This is still not a "mindless" computation, however, in that
the tax is on the "new value". If the "purchase
price" is $1,000,000 but is taken subject to a $1,000,000 existing first
loan, then the "value" of that property would be $2,000,000 even
though the tax would be computed on $1,000,000. </span><span style="color: #262626;"> </span><span style="color: #262626;">See: </span></span></div>
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<a href="http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB1888"><span style="background-color: #fff2cc; font-family: Times, Times New Roman, serif;">http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB1888</span></a></div>
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<span style="color: #262626; font-family: Times, Times New Roman, serif; font-size: xx-small; mso-bidi-font-family: Helvetica;">Some counties and cities impose
additional transfer taxes, not all of which provide a reduction for the “continuing
liens,” so further care is warranted.<span style="mso-spacerun: yes;">
</span>See also California Real Property journal, Vol. 23, No. 2, A Practical
Guide to Transfer Taxes in California by Dena Cruz and Scott Rogers which is a
detailed analysis of the transfer tax issue.<span style="mso-spacerun: yes;">
</span>It was published in 2005, so check the current statutes before relying
on it.</span><br />
<span style="color: #29303b;"><span style="background-color: #fff2cc; font-family: Times, Times New Roman, serif;">Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.</span></span></div>
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Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com0tag:blogger.com,1999:blog-2822837019307226924.post-50307068168022107982014-04-26T08:13:00.001-07:002015-07-13T09:36:44.025-07:00Be careful in hiring.<div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;">
<span style="background-color: #fff2cc; font-family: Times, Times New Roman, serif;">"Like an archer who wounds everyone is one who hires a passing
fool or drunkard." (Proverbs 26:10 ESV).</span></div>
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<span style="font-family: Times, Times New Roman, serif; mso-bidi-font-family: Helvetica;">Someone once said, "Marry in haste, repent at leisure."
This could easily be adapted to hiring employees: "Hire in haste,
repent at leisure."<o:p></o:p></span></div>
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<span style="font-family: Times, Times New Roman, serif; mso-bidi-font-family: Helvetica;">If you
make someone an archer who doesn't care about who he wounds, he might kill your
own people or innocents as well as the enemy. Skill in shooting is not enough.
The competence in shooting must be matched with the character and judgment to
do what is right. PASSING implies that the hirer did not take the time to learn
the character of the one he hired. He just hopes he isn't hiring a fool or a
drunkard. An employer must be careful in hiring. The customer typically equates
the character of the employer with that of the employee. If the customer trusts
the employer, they may also trust the employee. If that trust is broken,
whether by a breakdown of competence or character, then the customer will
ascribe that defect/offense to the employer who did the hiring. Take time to
examine competence and character before hiring and monitor them as time goes on
to make sure problems don't arise. If you realize that you have hired "an
archer who wounds everyone," act quickly and decisively.</span><br />
<span style="background-color: #fff3db; color: #29303b;"><span style="font-family: Times, Times New Roman, serif;">Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.</span></span></div>
Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com0tag:blogger.com,1999:blog-2822837019307226924.post-37750827186683310282014-03-11T20:18:00.004-07:002015-07-13T09:44:51.386-07:00Game Theory in Contract Drafting<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="color: #1a1a1a; font-family: Times, Times New Roman, serif;">I participate in a Mac user group for attorneys.<span style="mso-spacerun: yes;"> </span>One of the participants asked about the use
of game theory in the practice of law.<span style="mso-spacerun: yes;"> </span>Here
are my posts and follow up answers:<o:p></o:p></span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Times, Times New Roman, serif;"><br /></span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="color: #1a1a1a; font-family: Times, Times New Roman, serif;">I use game theory, of sorts, by using "baseball
arbitration" when I use an arbitration clauses. With baseball
arbitration, each party (lets call them "Buyer" and
"Seller") appoints an appraiser to come up with a value, and a third
"independent" appraiser is also retained. The "final"
price for the property is either the Buyer's appraised value or the Seller's
appraised value depending upon which one is closer to the third party
appraiser's value. In this way, each party have an incentive to be
realistic if not conservative in its valuation (a Buyer won't go too low and a
Seller won't go too high). If they do, the other party's value will be
chosen as the final price. For instance, let's say the Buyer's appraised
value is $1 mil. and the Seller's appraised value is $2 mil. If the
appraiser comes in at $1.7 mil, the Seller's $2 mil. becomes the price.
In the face of this, the Buyer has an incentive to come up with a higher
value, and the Seller has an incentive to come up with a lower value since they
don't know what the third party appraiser will do. I find this beneficial
because if the parties are close enough after their first two appraisals come
in, they might just elect to forego the third appraiser and agree on a value.
In any event, it tends to reduce the chances of wild discrepancies.
I also try to correctly analyze incentives in creating contracts and
attempt to incentivize the desired outcomes. As for a particular book
that influenced me, depending upon how you look at it, it is the entire field
of economics, or law and economics, but the concepts are well written in many
books on negotiation, business and other disciplines. Posner is a good
one to read if you can wade through it:<o:p></o:p></span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="color: #1a1a1a; font-family: Times, Times New Roman, serif;"> <o:p></o:p></span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="color: #1a1a1a; font-family: Times, Times New Roman, serif;"><a href="http://www.law.uchicago.edu/files/files/53.Posner.Values_0.pdf"><span style="color: #003fc6; text-decoration: none; text-underline: none;">http://www.law.uchicago.edu/files/files/53.Posner.Values_0.pdf</span></a><o:p></o:p></span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="color: #1a1a1a; font-family: Times, Times New Roman, serif;">or <o:p></o:p></span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="color: #1a1a1a; font-family: Times, Times New Roman, serif;"><a href="http://www.amazon.com/Economic-Analysis-Law-Richard-Posner/dp/0735563543/ref=sr_1_2?s=books&ie=UTF8&qid=1394497043&sr=1-2&keywords=economic+analysis+of+law"><span style="color: #003fc6; text-decoration: none; text-underline: none;">http://www.amazon.com/Economic-Analysis-Law-Richard-Posner/dp/0735563543/ref=sr_1_2?s=books&ie=UTF8&qid=1394497043&sr=1-2&keywords=economic+analysis+of+law</span></a><o:p></o:p></span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Times, Times New Roman, serif;"><br /></span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="color: #1a1a1a; font-family: Times, Times New Roman, serif;">Someone from the group emailed me and asked for some sample
language of the baseball arbitration, and I posted:<o:p></o:p></span></div>
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<span style="font-family: Times, Times New Roman, serif;"><br /></span></div>
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<span style="color: #1a1a1a; font-family: Times, Times New Roman, serif;">"If the BUYER has elected to have the then-current fair
market value of the SELLER Parcel determined by appraisal, the value will be
determined by three appraisers, one appointed by SELLER, one appointed by
BUYER, and the third selected by the other two appraisers (hereinafter
respectively “SELLER Appraiser,” “BUYER Appraiser,” “Third Appraiser,” and
collectively the “Appraisers”). Each of the Appraisers must be an MAI
appraiser who is certified by the State of California, with at least 10 year’s
experience in appraising businesses. Within five (5) days of BUYER’s
notice of its election to have the then-current fair market value of the SELLER
Parcel determined by appraisal, BUYER and SELLER shall exchange the names of
its respective appraiser, and those two appraisers shall select the Third
Appraiser within ten (10) days thereafter. If the SELLER Appraiser and
the BUYER Appraiser cannot agree upon the Third Appraiser, then either party
may apply to the Southern California Chapter of the Appraisal Institute for
appointment of the Third Appraiser (or if no procedure then exists for such
application, to the then-presiding Judge of the Superior Court of the State of
California, in and for the County of San Bernardino, Central Branch).
Within thirty (30) days of the appointment of the Third Appraiser, each of the
Appraisers shall complete an appraisal of SELLER’s Parcel to designate each of
the Appraisers’ opinion of the fair market value, as of the date of the
Exercise Notice, of the SELLER Parcel, as fully improved, using the Uniform
Standards of Professional Appraisal Practice of the Appraisal Institute.
None of the three Appraisers shall share their opinion of value with any of the
others, and the Appraisers shall confirm by telephone that they will deliver (by
overnight delivery with proof of receipt) their respective appraisal on each
other, SELLER and BUYER on a particular day not later than thirty-five (35)
days after the appointment of the Third Appraiser. The final price of the
SELLER Parcel shall be either the appraised value of the SELLER Appraiser or
the BUYER Appraiser, depending upon which of those appraisals is closest in
value to that of the Third Appraiser. In the event that the Third
Appraiser’s opinion of value is: a) exactly between the other two; or b)
greater than that of the SELLER Appraiser; or c) less than that of the BUYER
Appraiser, then the Third Appraiser’s valuation shall be the final price of the
SELLER Parcel, subject to the following minimum valuation. In no event
shall the fair market value of the SELLER Parcel be less than SELLER’s
undepreciated cost basis in that property, including all acquisition,
construction, development, permit, professional, costs, fees and
expenses."<o:p></o:p></span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Times, Times New Roman, serif;"><br /></span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="color: #1a1a1a; font-family: Times, Times New Roman, serif;">This is a bit different from the clause I described above and
would need to be modified to allow for the possibility for the parties to come
to agreement before the third party appraiser is chosen. Also, this
version increases risk from being the odd appraiser out in that the floor
and the caps are removed. For example, with this clause, if the third
party appraiser is higher than the Seller's price, the third party appraiser's
value becomes the price. Anything that increases the risk of having your
appraisal NOT chosen creates an incentive to be very conservative in your
valuation. Another difference is that this provides for a floor price
which the Seller cannot be required to sell below. If I were drafting
this today, I think that I would make the changes to make the clause look more
like what I described yesterday, but each case is different. You have to
look at the transaction, the desired results, undesirable results and the
incentives created by the agreements and the circumstances. It is also
good to draft it, walk away, look at it again, and look at it with the
different markets you might face when the clause is exercised. For
example, does the clause work in an increasing market, a decreasing market,
when the capital markets are flowing and loans are available, when not, etc.?
You can also consider particular clients. For example, if you have
a client that is so well financed that they could always cash out an
obligation, that is treated differently than a client that finds it hard to pay
their line of credit down to zero every year to meet the financial covenants of
that loan.<o:p></o:p></span></div>
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<span style="font-family: Times, Times New Roman, serif;"><span style="color: #1e242d;">Disclaimer: This web site is specifically for attorneys and is
designed for general information only. The information presented above should
not be construed to be formal legal advice nor the formation of a lawyer/client
relationship. The above must be interpreted by a an attorney licensed in
the jurisdiction it is to be used in.</span><span style="color: #1a1a1a;"> </span><span style="color: #1a1a1a;"> </span></span><o:p></o:p></div>
Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com0tag:blogger.com,1999:blog-2822837019307226924.post-73529564701504759012013-09-17T08:30:00.001-07:002015-07-13T09:44:57.751-07:00Ambiguous Letters of Intent <!--[if gte mso 9]><xml>
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<span style="font-family: Times, Times New Roman, serif;">I have received questions over the years from clients relating to the
status of their relationship with a potential buyer or seller of property where
there was a signed “letter of intent” followed by some “due diligence”
investigation, etc. With real property,
the contract must be in writing in order to be enforceable under California
law, however, there are exceptions to this where there has been substantial
part performance by one party or where there was substantial money spent on due
diligence or other items in reliance on a verbal agreement. Also, one party might claim that the other
party cannot break off negotiations because of the “covenant of good faith and
fair dealing” which might require a party to continue negotiating in good
faith. All of these theories, while they
might be very difficult for a disgruntled party to actually prevail on, could lead
to lawsuits, attorneys, delays, and in the case of a claim against a seller of
real property, a lis pendens recorded against the property which could prevent
it from being sold to a third party.</span></div>
<div class="MsoBodyText" style="text-align: justify;">
<span style="font-family: Times, Times New Roman, serif;"><o:p></o:p></span></div>
<div class="MsoBodyText" style="text-align: justify;">
<span style="font-family: Times, Times New Roman, serif;"><br /></span></div>
<div class="MsoBodyText" style="text-align: justify;">
<span style="font-family: Times, Times New Roman, serif;">I believe that it is a good idea to have the general terms agreed to by
the parties before money and time is spent on drafting contracts since you will
sometimes learn of fundamental flaws in the deal early enough to save these
costs, and it is easier to negotiate on 5-7 conceptual bullet points than it is
to draft a lengthy contract. One of the
most common problems with letters of intent, however, is ambiguity. Is it an offer or is it a non-binding letter
of intent? Many letters will contain
elements of both which create the ambiguity.
For instance, a letter could state: “this letter is subject to
additional terms to be contained in a final contract,” indicating that it is a
non-binding letter of intent. The same
letter could conclude with the phrase, “this letter will be deemed rejected if
not accepted by 5:00 p.m. on September ___, 2013.” This is language of offer and acceptance,
i.e. contract, not non-binding letter of intent. Where a letter containing this type of
ambiguity is signed, followed by substantial reliance or due diligence by a
party, it could lead to litigation or other unpleasantness.<o:p></o:p></span></div>
<div class="MsoBodyText" style="text-align: justify;">
<span style="font-family: Times, Times New Roman, serif;"><br /></span></div>
<div class="MsoBodyText" style="text-align: justify;">
<span style="font-family: Times, Times New Roman, serif;">Where a deal is small and it is not anticipated that there will be
much, if any, money or effort spent on due diligence before a contract is
executed, a clause something like the following may be used to clarify the
non-binding nature of the letter agreement: “This letter may form the basis of
further purchase discussions, but it is not an offer capable of being
accepted. If you believe the terms
outlined in this letter are acceptable, please let me know so the final terms
can be included in a written agreement which will be effective only when
executed by the parties.” Of course, you
have to make sure that the rest of the letter doesn’t conflict with this
statement as mentioned above. Where a
deal is larger, or it is anticipated that the parties could spend a lot on due
diligence before entering into a final contract, a more formal letter of intent
is prudent. For instance, some
non-binding letters of intent will have “binding” portions, like
confidentiality and insurance and indemnity for pre-contract “due
diligence.” This type of partially
binding/partially non-binding letter of intent is usually best drafted, or at
least reviewed, by an attorney, especially where the dollar values are
high. Although this focuses on real
property transactions, similar principals apply to transactions involving asset
purchases, stock sale or other transactions. <o:p></o:p></span></div>
<div class="MsoBodyText" style="text-align: justify;">
<span style="font-family: Times, Times New Roman, serif;"><br /></span></div>
<div class="MsoBodyText" style="text-align: justify;">
<span style="font-family: Times, Times New Roman, serif;">Here are other samples of non-binding letter of intent provisions,
again, subject to the warnings above re: using ambiguous terms:<o:p></o:p></span></div>
<div class="MsoBodyText" style="text-align: justify;">
<span style="font-family: Times, Times New Roman, serif;"><br /></span></div>
<div class="MsoBodyText" style="text-align: justify;">
<u><span style="font-family: Times, Times New Roman, serif;">Option 1<o:p></o:p></span></u></div>
<div class="MsoBodyText" style="text-align: justify; text-indent: .5in;">
<span style="font-family: Times, Times New Roman, serif;"><br /></span></div>
<div class="MsoBodyText" style="text-align: justify; text-indent: .5in;">
<span style="font-family: Times, Times New Roman, serif;">This letter may form the basis of further
settlement discussions, but it is not an offer capable of being accepted. If you believe the terms outlined herein are
acceptable, please let me know so I may reduce them to a <b>***contract or settlement and release agreement***</b>. Nothing in this letter will be admissible in
litigation pursuant to <i>California Evidence Code</i> §§ 1152 and 1154 and <i>Rule</i>
408 of the <i>Federal Rules of Evidence</i>.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Times, Times New Roman, serif;"><br /></span></div>
<u><span style="font-family: Times, Times New Roman, serif;">Option 2</span></u><br />
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Times, Times New Roman, serif;"><br />
This letter may form the basis of
further settlement discussions, but it is not an offer capable of being
accepted. If you believe the terms
outlined herein are acceptable, please let me know so our attorneys can write
them into a <b>***contract or settlement
and release agreement***</b> which will only be effective when executed by all
parties. Nothing in this letter will be
admissible in litigation pursuant to <i>California Evidence Code</i> §§ 1152 and
1154 and <i>Rule</i> 408 of the <i>Federal Rules of Evidence</i>.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Times, Times New Roman, serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<u><span style="font-family: Times, Times New Roman, serif;">Option
3<o:p></o:p></span></u></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Times, Times New Roman, serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify; text-indent: .5in;">
<span style="font-family: Times, Times New Roman, serif;">This letter may form the basis of further purchase
discussions, but it is not an offer capable of being accepted. If you believe the terms outlined in this
letter are acceptable, please let me know so the final terms can be included in
a written agreement which will be effective only when executed by the parties
and approved by ______________, as necessary. [when third party approval is
also necessary]<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Times, Times New Roman, serif;"><br /></span></div>
<div class="MsoBodyText" style="text-align: justify; text-indent: .5in;">
<span style="font-family: Times, Times New Roman, serif;">For the mutual protection of both of our
clients, neither party will be bound until final written agreement is prepared
and executed by the parties. This letter
may form the basis of further purchase discussions, but it is not an offer
capable of being accepted. If you
believe the terms outlined in this letter are acceptable, please let me know so
that we may prepare a formal <b>***contract or
settlement and release agreement***</b>.
My client is interested in arriving at a mutually acceptable
understanding as quickly as possible. I
look forward to your response.<o:p></o:p></span></div>
<div class="MsoBodyText" style="text-align: justify;">
<span style="font-family: Times, Times New Roman, serif;"><br /></span></div>
<div class="MsoBodyText" style="text-align: justify;">
<span style="background-color: #fff3db; color: #29303b; font-family: Times, Times New Roman, serif; text-align: left;">Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.</span></div>
<!--EndFragment-->Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com0tag:blogger.com,1999:blog-2822837019307226924.post-44258468436861880622013-08-04T15:02:00.001-07:002015-07-13T09:45:16.821-07:00Lunch Presentation to Christian Club at Loyola Law School (Part 3)<!--[if gte mso 9]><xml>
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<span style="font-family: Times, Times New Roman, serif;"><u><span style="font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman";">Practical
2:</span></u><span style="font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman";"><o:p></o:p></span></span></div>
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<span style="font-family: Times, Times New Roman, serif; mso-bidi-font-family: "Times New Roman";">Please
God not man<o:p></o:p></span></div>
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<span style="font-family: Times, Times New Roman, serif;"><span style="font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman";">"<b>I
tell you, my friends, do not fear those who kill the body, and after that have
nothing more that they can do. But I will warn you whom to fear: fear him who,
after he has killed, has authority to cast into hell. Yes, I tell you, fear
him! Are not five sparrows sold for two pennies? And not one of them is
forgotten before God. Why, even the hairs of your head are all numbered. Fear
not; you are of more value than many sparrows.</b>"</span><span style="font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman";">
(Luke 12:4-9 ESV). <o:p></o:p></span></span></div>
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<span style="font-family: Times, Times New Roman, serif; mso-bidi-font-family: "Times New Roman";">In business I have found that putting
too much stock, one way or another, in the affirmation or condemnation of
another person is a snare. Praise of people can be addicting. If you don't keep
it in perspective, then you do things that are not appropriate to continue
receiving praise. In some cases that can be really bad like violating ethics or
the law. It would never start out like that. It would usually start out with
much smaller issues, like preferring a client's project goals above those of
other clients, your own family and/or your own health when the objectively
situation does not require or warrant it. Putting too much stock in the
criticism of another person, will equally be a snare.<o:p></o:p></span></div>
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<span style="font-family: Times, Times New Roman, serif; mso-bidi-font-family: "Times New Roman";">Objectively listen to and consider the
criticism of other people. Any
messenger, even one who is very unpleasant, may have something that I need to
hear. That unpleasant, angering, even exasperating person can be more loving
to/positive for me than those who manipulatively flatter or who genuinely like
me but don't care/risk enough to point out my flaws.<o:p></o:p></span></div>
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<span style="font-family: Times, Times New Roman, serif;"><span style="font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman";">"<b>Better
is open rebuke than hidden love. Faithful are the wounds of a friend; profuse
are the kisses of an enemy.</b>"</span><span style="font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman";"> (Proverbs 27:5, 6 ESV).<o:p></o:p></span></span></div>
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<span style="font-family: Times, Times New Roman, serif; mso-bidi-font-family: "Times New Roman";">Only the fool rejects correction which
is needed, whether that correction manifests itself in through the conviction
of a Bible passage, the Spirit of God through prayer, circumstances or people.
The one who persists in that rejection does so at his peril. "<b>A man who remains stiff-necked after
many rebukes will suddenly be destroyed—without remedy.</b>" (Proverbs
29:1 NIV84). <o:p></o:p></span></div>
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<span style="font-family: Times, Times New Roman, serif; mso-bidi-font-family: "Times New Roman";"> Rather than focusing on the roller
coaster of the opinions of others, I have found it more healthy to focus on pleasing
God, from whom we can receive genuine, untainted approval that matters:</span></div>
</div>
<div style="text-align: justify;">
<span style="font-family: Times, Times New Roman, serif;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-fareast-font-family: "MS 明朝"; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-fareast;">"<b>His master said to
him, 'Well done, good and faithful servant. You have been faithful over a little;
I will set you over much. Enter into the joy of your master.</b>'"</span><span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-fareast-font-family: "MS 明朝"; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-fareast;">
(Matthew 25:21 ESV).</span></span><br />
<span style="background-color: #fff3db; color: #29303b;"><span style="font-family: Times, Times New Roman, serif;">Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.</span></span></div>
Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com0tag:blogger.com,1999:blog-2822837019307226924.post-4856761954314703712013-08-04T14:59:00.002-07:002015-07-13T09:45:35.754-07:00Lunch Presentation to Christian Club at Loyola Law School (Part 2)<!--[if gte mso 9]><xml>
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<span style="font-family: Times, Times New Roman, serif;"><u><span style="font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman";">Practical
Point 1:</span></u><span style="font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman";"> </span></span></div>
<div class="MsoNormal" style="line-height: 20.0pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none; text-justify: inter-ideograph;">
<span style="font-family: Times, Times New Roman, serif; mso-bidi-font-family: "Times New Roman";">Go
meal to meal.</span></div>
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<span style="font-family: Times, Times New Roman, serif; mso-bidi-font-family: "Times New Roman";">One of the toughest physical challenges
a person to go through is hell week for SEALs. Chris Kyle, a SEAL sniper
wrote that the best way to get through hell weak is to go meal to meal.
They fed them every 6 hours, so relief was never more than 5 hours and 59
minutes away. His point was that if you focus on what's coming tomorrow
or the next day, week, month or year, you'll get freaked out and want to quit.</span></div>
<div class="MsoNormal" style="line-height: 21.0pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none; text-indent: .5in; text-justify: inter-ideograph;">
<span style="font-family: Times, Times New Roman, serif;"><span style="color: #000f19; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman";">Matt. 6:25-34 says: "</span><a href="http://bible.cc/matthew/6-25.htm"><b><span style="color: #007df4; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">25</span></b><span style="color: #000f19; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">“For this reason I say to you, do not be worried about
your life, as to what you will eat or what you will drink; nor for
your body, as to what you will put on. Is not life more than food, and the
body more than clothing?</span></a><a href="http://bible.cc/matthew/6-26.htm"><b><span style="color: #007df4; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">26</span></b><span style="color: #000f19; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">“Look at the birds of
the air, that they do not sow, nor reap nor gather into barns, and <i>yet</i> your
heavenly Father feeds them. Are you not worth much more than they?</span></a><a href="http://bible.cc/matthew/6-27.htm"><b><span style="color: #007df4; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">27</span></b><span style="color: #000f19; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">“And who of you by being worried can add a <i>single</i> hour
to his life?</span></a><a href="http://bible.cc/matthew/6-28.htm"><b><span style="color: #007df4; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">28</span></b><span style="color: #000f19; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">“And why are you
worried about clothing? Observe how the lilies of the field grow; they do not
toil nor do they spin,</span></a><a href="http://bible.cc/matthew/6-29.htm"><b><span style="color: #007df4; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">29</span></b><span style="color: #000f19; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">yet I say to you that
not even Solomon in all his glory clothed himself like one of these.</span></a><a href="http://bible.cc/matthew/6-30.htm"><b><span style="color: #007df4; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">30</span></b><span style="color: #000f19; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">“But if God so clothes the grass of the field, which
is <i>alive</i> today and tomorrow is thrown into the furnace, <i>will
He</i> not much more <i>clothe</i> you? You of little faith!</span></a><a href="http://bible.cc/matthew/6-31.htm"><b><span style="color: #007df4; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">31</span></b><span style="color: #000f19; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">“Do not worry then, saying, ‘What will we eat?’ or ‘What
will we drink?’ or ‘What will we wear for clothing?’</span></a><a href="http://bible.cc/matthew/6-32.htm"><b><span style="color: #007df4; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">32</span></b><span style="color: #000f19; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">“For the Gentiles eagerly seek all these things; for your
heavenly Father knows that you need all these things.</span></a><a href="http://bible.cc/matthew/6-33.htm"><b><span style="color: #007df4; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">33</span></b><span style="color: #000f19; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">“But seek first His kingdom and His righteousness, and all
these things will be added to you.</span></a><span style="color: #000f19; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman";"> </span><a href="http://bible.cc/matthew/6-34.htm"><b><span style="color: #007df4; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">34</span></b><span style="color: #000f19; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">“So do not worry about tomorrow; for tomorrow will care
for itself. Each day has enough trouble of its own.</span></a><span style="color: #000f19; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman";">" <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 21.0pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none; text-indent: .5in; text-justify: inter-ideograph;">
<span style="font-family: Times, Times New Roman, serif;"><span style="color: #0c6312; font-family: "Times New Roman"; mso-bidi-font-family: "Times New Roman";"> </span>Law
School, the bar and much of life is more stress control, perseverance and
time management vs. intellect and raw knowledge.</span><br />
<span style="background-color: #fff3db; color: #29303b;"><span style="font-family: Times, Times New Roman, serif;">Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.</span></span></div>
Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com0tag:blogger.com,1999:blog-2822837019307226924.post-79973479023838319912013-08-04T14:57:00.002-07:002015-07-13T09:45:59.929-07:00Lunch Presentation to Christian Club at Loyola Law School (Part 1)<span style="font-family: Times, Times New Roman, serif;">Three thoughts which I wish had been shared with me when I was going to school here, one more theoretical, and two practical.</span><br />
<span style="font-family: Times, Times New Roman, serif;"><br /></span>
<span style="font-family: Times, Times New Roman, serif;">Theoretical:</span><br />
<span style="font-family: Times, Times New Roman, serif;"><br /></span>
<span style="font-family: Times, Times New Roman, serif;">What on earth are you here for?</span><br />
<span style="font-family: Times, Times New Roman, serif;"><br /></span>
<span style="font-family: Times, Times New Roman, serif;">Pursuit of pleasure, he who dies with the most toys wins, great and noble achievements.
3,000 years ago, King Solomon explored all of these purposes and declared them "meaningless" and many modern non-Christian observers are reaching the same conclusions.</span><br />
<span style="font-family: Times, Times New Roman, serif;"><br /></span>
<span style="font-family: Times, Times New Roman, serif;">Rick Warren wrote Purpose Driven Life, subtitled “What on Earth am I here For?”
Biblical perspective of our purpose in life
I want to focus on day 31, under “SHAPE: Employing Your Experiences:”</span><br />
<span style="font-family: Times, Times New Roman, serif;"><br /></span>
<br />
<span style="font-family: Times, Times New Roman, serif;">“God never wastes a hurt! In fact your greatest ministry will most likely come out of your greatest hurt. ...God intentionally allows you to go through painful experiences to equip you for ministry to others. The Bible says, "He comforts us in all our troubles so that we can comfort others. When others are troubled, we will be able to give them the same comfort God has given us." If you really desire to be used by God, you must understand a powerful truth: The very experiences that you have resented or regretted most in life - the ones you've wanted to hide and forget- are the experiences God wants to use to help others. They are your ministry...”</span><br /><span style="font-family: Times, Times New Roman, serif;">“10 For we are God's workmanship, created in Christ Jesus to do good works, which God prepared in advance for us to do.” Eph 2:10.
In Greek, the word workmanship is: “Poiema” from which we get the word "poem"
From this passage, we learn that we are created by God as a wonderful work of art for the purpose of doing some good works that he has laid out for us.</span><br /><span style="font-family: Times, Times New Roman, serif;">Diligently seek what the Lord wants you to do with your life. Not what your parents or other people want you to do. It will be framed by the Bible, but it will be intimate and personal as is our Lord.</span><br />
<br />
<span style="font-family: Times, Times New Roman, serif;"><br /></span>
<span style="background-color: #fff3db; color: #29303b;"><span style="font-family: Times, Times New Roman, serif;">Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.</span></span>Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com0tag:blogger.com,1999:blog-2822837019307226924.post-85252630364257726002012-12-24T09:50:00.002-08:002015-07-13T09:46:26.081-07:00Sufficient Legal DescriptionsAn estate planning attorney recently wrote me with this question:
"Hi Kevin!
Are title insurance companies happy to have a simple legal such as Map #0001, Parcel 0202 as opposed to a more extensive legal description?"
Here is my answer:
"I've got kind of a roundabout answer and some practical suggestions. First, real estate law is what the title companies say it is. From a practical standpoint, whether a title company underwriter is correct or not, the decision he or she makes is, for practical purposes the law. Sometimes we can persuade the underwriter to come to a different conclusion, or get a different underwriter from another title company to make a different underwriting decision, or pay more money for an endorsement of some sort, but the title company has the final say, and if we don't like it, then the remedy is to file a quite title action or probate or whatever we need to do to get a court order. This is a very bad result for a client. I am assuming that you are asking for the purpose of funding trusts. One way of doing this is to get the copy of the deed vesting title to the client when the FIRST purchased it an use that. It is also good to compare that legal to the last deed of trust (to a non-private lender) to see if those legals match. If they do, then you have a reasonable assurance that the legal is correct. I would recommend against shortening or interpreting that legal, and where possible, cut and paste rather than retyping. If you do have to retype, then have one person read the legal description to another person who will check it against what is written. Legals can be mind-numbing, and it helps to have two people involved in this process. This method gives you a high decree of success that you have gotten it right, but it is not insurance. Also, it is susceptible to garbage in, garbage out if the first legal was not accurate. As far as whether this method is above or below the standard of care for an estate planning attorney, I don't know. The best way that I have seen this done is to have the client bring in the title policy from when they purchased the property, then send the proposed deed (using the legal in the title policy) to the same title company with a request that you want them to issue a 107.9 endorsement to that title policy. There may be a charge for the endorsement of +/- $150, but it is INSURANCE in the event of an error in that legal description. This would likely not only meet the standard of care, it also caries insurance as to the amount of the original policy. The endorsement will only ADD the trust as an insured under the original policy, but it does not insure anything that has happened to the title AFTER the date of the policy. If the client wants that, then they will likely have to purchase a new policy. If the client is planning on selling the property within the next 2-3 years, then I recommend that the client spend the money on a new policy and that they pay an extra <span style="font-family: Times, Times New Roman, serif;">premium for a "binder" which then can be used in the subsequent sale. The reason for this is that you pick up the additional coverage, but you also learn sooner rather than later about potential problems with the title which need to be resolved prior to selling it. Time is a big plus in solving title problems. As to the real legal answer to your question on the sufficiency of a legal description for the deed, See, Miller and Starr, California Real Estate 3rd Section 11:13 (2004):
"Description required. In order to give constructive notice, the instrument must contain a description of the real property sufficient to identify it, or it must refer to another recorded document that contains an adequate description.
Adequacy of the description. Minor imperfections in the description do not defeat the notice given by recordation of the instrument as long as the property is clearly identifiable and the instrument provides enough information that an examination of the public records or the referenced documents will provide the subsequent party with knowledge of the correct description or property. However, where the property cannot be clearly identified, the instrument does not constitute constructive notice. When extrinsic evidence is admitted to explain an ambiguous description, adequacy of the description is a question of fact, but when the adequacy or inadequacy appears on the face of the instrument, it is a question of law."
Sample language on the cover letter to the title company (in this case transferring the title from individual owners to an LLC owned by them):
"Please find enclosed the following documents related to this matter: 1) Copy of signed Operating Agreement for the LLC; 2) Original Grant Deed; 3) Original Preliminary Change of Ownership Report; and 4) Original tax declaration (not to be recorded). You should already have copies of the LLC1, LLC12, and the lender’s consent to the transfer, but let me know if you need me to send those documents or anything else. Please attach the correct legal description to the deed, record the grant deed, and issue a 107.9 endorsement to the title policy. You may bill the LLC for the $100 endorsement, plus the recording and handling charges, and mail it to …"</span><br />
<span style="background-color: #fff3db; color: #29303b;"><span style="font-family: Times, Times New Roman, serif;">Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.</span></span>Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com0tag:blogger.com,1999:blog-2822837019307226924.post-66112164126704198872011-04-06T08:10:00.000-07:002015-07-13T09:46:46.442-07:00Micro-Lending and MissionsI have been studying microbanking recently to see what role it might play in foreign and domestic missions. I went to the opening of the movie To Catch A Dollar (http://www.tocatchadollar.com/), a documentary about bringing the Grameen Bank micro-lending structure to the US. One of the panelists on the movie was the head of www.kiva.org, which is a non-profit designed to link concerned people to worthy poor people to fund loans in increments of $25. The head of Kiva is a very young tech-savy person, and Kiva has really grown fast. “Since Kiva was founded in 2005: 571,457 Kiva lenders; $205 million in loans; 98.65% Repayment rate - We work with: 131 Field Partners; 450 volunteers around the world; 59 different countries” (http://www.kiva.org/about). From a missional viewpoint, it seems that this has application in meeting a very immediate tangible needs of the people ministered to, immediate and natural connections to locals (with weekly meeting requirements between the lending or<span style="font-family: Times, Times New Roman, serif;">ganization and the borrowers according to the Grameen model), and entry into otherwise closed countries. A missionary could look into either becoming a field partner so that people they interact with could become loan recipients (http://www.kiva.org/partners/info), or assist their people to get whatever they need together to work with another field partner (http://www.kiva.org/partners). Either of these could be a low-cost entry into a field which could really benefit people and open doors for the Gospel. Please contact me if you're interested in this.</span><br />
<span style="background-color: #fff3db; color: #29303b;"><span style="font-family: Times, Times New Roman, serif;">Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.</span></span>Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com1tag:blogger.com,1999:blog-2822837019307226924.post-87428107466629527582011-04-05T19:08:00.000-07:002015-07-13T09:47:06.238-07:00Virtual Notary - NOT IN CA<span style="font-family: Times, Times New Roman, serif;">See the following release from the California Secretary of State before paying for an online notary.</span><br />
<span style="font-family: Times, Times New Roman, serif;"><br /></span>
<span style="font-family: Times, Times New Roman, serif;">http://www.sos.ca.gov/business/notary/customer-alert.htm</span><br />
<span style="font-family: Times, Times New Roman, serif;"><br /></span>
<span style="font-family: Times, Times New Roman, serif;">Notaries are pretty accessible. Until there is a clear safe harbor for this kind of notarization, don't risk it.</span><br />
<span style="background-color: #fff3db; color: #29303b;"><span style="font-family: Times, Times New Roman, serif;">Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. An attorney licensed to practice in the jurisdiction where the matter occurs must interpret the facts of any specific case and advise as to whether and how any of these concepts may apply to a particular case.</span></span>Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com2tag:blogger.com,1999:blog-2822837019307226924.post-57695186693972036692011-02-02T23:03:00.000-08:002017-02-10T16:01:51.446-08:00Negotiation and the Bible<div class="MsoNormal" style="line-height: 16.0pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none; text-justify: inter-ideograph;">
<span style="color: #1e242d; font-family: Georgia; font-size: 13.0pt; mso-bidi-font-family: Georgia;">I once wrote to a client when he was negotiating with
someone on a commission:<o:p></o:p></span></div>
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<span style="color: #1e242d; font-family: Georgia; font-size: 13.0pt; mso-bidi-font-family: Georgia;">"…Don’t write anything back saying “agreed” or
anything of the sort. Just ask questions, like, so, is __________ also ok with
the staggered payment of the lease commission if we agree to the 4% commission
to her? The distillation of my 19 years as an attorney is avoid making
definitive statements. Just restate the other person’s position and ask if you
understand them correctly. It generally goes better for you, and a question can
rarely be used as a legal “admission.” Actually, it goes way back, to the
Bible:<o:p></o:p></span></div>
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<span style="color: #1e242d; font-family: Georgia; font-size: 13.0pt; mso-bidi-font-family: Georgia;">“19 My dear brothers, take note of this: Everyone should
be quick to listen, slow to speak and slow to become angry, 20 for man's anger
does not bring about the righteous life that God desires.” James 1:19-20.<o:p></o:p></span></div>
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<span style="color: #1e242d; font-family: Georgia; font-size: 13.0pt; mso-bidi-font-family: Georgia;">“8 Even a fool is thought wise if he keeps silent, and
discerning if he holds his tongue.” Prov. 17:28.<o:p></o:p></span></div>
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<span style="color: #1e242d; font-family: Georgia; font-size: 13.0pt; mso-bidi-font-family: Georgia;">“A gentle answer turns away wrath, but a harsh word
stirs up anger.” Prov 15:1.<o:p></o:p></span></div>
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<span style="color: #1e242d; font-family: Georgia; font-size: 13.0pt; mso-bidi-font-family: Georgia;">“</span><span style="color: #010f18; font-family: Georgia; font-size: 13.0pt; mso-bidi-font-family: Arial;">It is a trap to dedicate something
rashly and only later to consider one’s vows.” Prov. 20:25.<o:p></o:p></span></div>
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<br /></div>
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<span style="color: #010f18; font-family: Georgia; font-size: 13.0pt; mso-bidi-font-family: Arial;">“Where there is no guidance, a people falls, but in an abundance
of counselors there is safety.”<span style="mso-spacerun: yes;"> </span>Prov.
11:14.<o:p></o:p></span></div>
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<br /></div>
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<span style="color: #010f18; font-family: Georgia; font-size: 13.0pt; mso-bidi-font-family: Arial;">“‘</span><span style="color: #010f18; font-family: Georgia; font-size: 13.0pt; mso-bidi-font-family: Arimo;">It’s no good, it's no good!’ says the
buyer-- then goes off and boasts about the purchase.” Prov. 20:14.<span style="mso-spacerun: yes;"> </span>A principle of economics is that a person’s
actions are better indicators of belief/values than his or her words.<o:p></o:p></span></div>
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<span style="color: #1e242d; font-family: Georgia; font-size: 13.0pt; mso-bidi-font-family: Georgia;">Ben Franklin also thought this method was the best for
argumentation: “But he soon learned how to be modest in argument: to say, “It
seems to me,” or “I apprehend a thing to be so.” Also, he found one could often
argue even more effectively by not making firm declarations, but by asking
subtle and gentle questions. His opponents would soon make concessions from
which they could fine no logical way out. Frequently, in this way, he could win
an argument and yet not lose a friend.” Benjamin Franklin: Inventing America by
Edwin S. Gaustad."<o:p></o:p></span></div>
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<br /></div>
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<span style="color: #1e242d; font-family: Georgia; font-size: 13.0pt; mso-bidi-font-family: Georgia;">Perhaps one of the greatest examples of negotiation is between
Abraham and God on the destruction of Sodom related in Genesis 18:22-23.<span style="mso-spacerun: yes;"> </span>Abraham starts out with: </span><span style="color: #010f18; font-family: Georgia; font-size: 13.0pt; mso-bidi-font-family: Arial;">“Will you indeed sweep away the righteous with the wicked?<span style="mso-spacerun: yes;"> </span>Suppose there are fifty righteous within the
city. Will you then sweep away the place and not spare it for the fifty
righteous who are in it?<span style="mso-spacerun: yes;"> </span>Far be it from
you to do such a thing, to put the righteous to death with the wicked, so that the
righteous fare as the wicked! Far be that from you! Shall not the Judge of all
the earth do what is just?”<span style="mso-spacerun: yes;"> </span>God concedes
that he would not destroy the city if 50 righteous could be found in it.<span style="mso-spacerun: yes;"> </span>Abraham then goes back lowering the
threshold, to 45, 40, 30, 20 and finally 10, each time gaining a concession
that the city would not be destroyed if the lowered number of righteous could
be found.<span style="mso-spacerun: yes;"> </span>Much has been written on this
interaction, and I wouldn’t attempt to add any more insight to those
discussions. <span style="mso-spacerun: yes;"> </span>I do observe, however, some
interesting dynamics at play in this story.<span style="mso-spacerun: yes;">
</span>The bargaining power between God and Abraham was obviously unequal.<span style="mso-spacerun: yes;"> </span>Abraham knew who he was negotiating against,
and his values.<span style="mso-spacerun: yes;"> </span>He reminded God of those
values and worked respectfully and tactfully toward the desired goal.<span style="mso-spacerun: yes;"> </span>He also avoided the head on conflict and used
more questions than statements.<o:p></o:p></span></div>
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<br /></div>
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<span style="color: #010f18; font-family: Georgia; font-size: 13.0pt; mso-bidi-font-family: Arial;">Can we extract any principles from these?<span style="mso-spacerun: yes;"> </span>Here are some, but I would love to here your
thoughts:</span></div>
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<span style="color: #1e242d; font-family: Georgia; font-size: 13pt; text-indent: -0.25in;"><br /></span></div>
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</div>
<ul>
<li><span style="color: #1e242d; font-family: Georgia; font-size: 13pt; text-indent: -0.25in;">Learn as much as you possibly can about what you’re negotiating
about, what your goals are, what your best alternatives to making a deal are,
your negotiating partner and his or her goals, values and best alternatives.</span></li>
<li><span style="color: #1e242d; font-family: Georgia; font-size: 13pt; text-indent: -0.25in;">Listen more than talk.</span></li>
<li><span style="color: #1e242d; font-family: Georgia; font-size: 13pt; text-indent: -0.25in;">Avoid head to head conflicts.</span></li>
<li><span style="color: #1e242d; font-family: Georgia; font-size: 13pt; text-indent: -0.25in;">Ask a lot of questions.</span></li>
<li><span style="color: #1e242d; font-family: Georgia; font-size: 13pt; text-indent: -0.25in;">Take time for reflection and obtaining advice before making a
commitment.</span></li>
<li><span style="color: #1e242d; font-family: Georgia; font-size: 13pt; text-indent: -0.25in;">Get good advice before making a commitment.</span></li>
<li><span style="color: #1e242d; font-family: Georgia; font-size: 13pt; text-indent: -0.25in;">Keep in mind the long term relationship more than just the
immediate transaction.</span></li>
<li><span style="color: #1e242d; font-family: Georgia; font-size: 13pt; text-indent: -0.25in;">Commit to a win-win or no deal strategy.</span></li>
<li><span style="color: #1e242d; font-family: Georgia; font-size: 13pt;">Remember
to question everything that the other person says keeping in mind that their
actions are a better indicator of belief than are words.</span></li>
</ul>
Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com0tag:blogger.com,1999:blog-2822837019307226924.post-63266668472533433172011-01-19T10:25:00.000-08:002015-07-13T09:47:32.908-07:00New California anti-deficiency provisions effective January 1, 2011Effective January 1, 2011, the holder of a first trust deed secured by 1-4 family residential dwelling units may not obtain a deficiency judgment for the unpaid balance of the note after the lender accepts a "short payoff" or "short sale," i.e. less than the full payoff in the sale of the property to a third party. While this does not specifically state that a lender may not demand a separate unsecured note as a condition for approving the short sale and does not state that the provision is not waive-able by the debtor after a default has occurred, I would fully expect that a court would not allow a lender to successfully impose such a condition. This adds to the California maze of anti-deficiency/one action rules when it comes to the rights and remedies of real property secured lenders in California. If you have any questions as to how these laws affect a particular loan, please feel free to contact me. As with all the tinkering done by the legislature in the area of foreclosures, it is an open question as to whether this will help or hurt the situation. The lender may be left with the choice of accept or reject a short payoff as payment in full even when the borrower would like to offer an unsecured note. <br />
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<br />
Cal Code Civ Proc § 580e (2010)<br />
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§ 580e. Deficiency under note secured by first deed of trust or first motgage; Sale for less that remaining amount of indebtedness due; Written consent of holder of first deed of trust or first mortgage as obligation; Fraud<br />
<br />
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(a) No judgment shall be rendered for any deficiency under a note secured by a first deed of trust or first mortgage for a dwelling of not more than four units, in any case in which the trustor or mortgagor sells the dwelling for less than the remaining amount of the indebtedness due at the time of sale with the written consent of the holder of the first deed of trust or first mortgage. Written consent of the holder of the first deed of trust or first mortgage to that sale shall obligate that holder to accept the sale proceeds as full payment and to fully discharge the remaining amount of the indebtedness on the first deed of trust or first mortgage.<br />
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(b) If the trustor or mortgagor commits either fraud with respect to the sale of, or waste with respect to, the real property that secures the first deed of trust or first mortgage, this section shall not limit the ability of the holder of the first deed of trust or first mortgage to seek damages and use existing rights and remedies against the trustor or mortgagor or any third party for fraud or waste.<br />
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(c) This section shall not apply if the trustor or mortgagor is a corporation or political subdivision of the state.<br />
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<br />
History: <br />
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Added Stats 2010 ch 701 § 1 (SB 931), effective January 1, 2011.<br />
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DEERING'S CALIFORNIA CODE ANNOTATED<br />
Copyright © 2011 by Matthew Bender & Company, Inc.<br />
a member of the LexisNexis Group.<br />
All rights reserved.<br />
<br />
Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com0tag:blogger.com,1999:blog-2822837019307226924.post-50371881099634449872009-09-24T06:52:00.000-07:002015-07-13T09:47:39.746-07:00Office Vacancy Rates in Inland EmpireOne broker (see link below) has conducted a vacancy survey on office space in Redlands, CA and concluded a 43% vacancy rate, and an economist reports a 23% vacancy rate in the entire Inland Empire.<br />
<br />
What is your experience? Is this right on, high or low? Is the conclusion that this is a good time to rent or buy correct, or is it too early to jump in? One concern I have about a tenant jumping in at this time is to make sure that there is a non-disturbance agreement signed by the lender. Otherwise, your primo lease will be eliminated if the owner loses the building to foreclosure.<br />
<br />
http://www.topix.com/city/redlands-ca/2009/09/vacancy-rate-reaches-43-percent-for-redlands-office-space<br />
<br />
Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com0tag:blogger.com,1999:blog-2822837019307226924.post-42215246201262784492009-04-29T22:01:00.000-07:002015-07-13T09:48:43.045-07:00How to read a preliminary title report<span style="font-family: Times, Times New Roman, serif;">Title insurance is a basic and necessary part of real estate purchases. It is one of the first things obtained in the due diligence process. It is not insurance itself, but it shows what the title insurance company intends to exclude from the policy of title insurance if they were to issue insurance on the property at that moment. The practical translation of a title insurance exception is that the title insurer will not defend you against any claim relating to the excepted item (often a recorded document). This can be a devastating loss. A preliminary title report usually costs somewhere in the order of $500, but this is typically not billed until the escrow closes. If the escrow closes and a title policy is purchased, the "prelim" is typically not charged. The exceptions are typically numbered, and in future posts I will give specific examples of common exceptions and how they are typically evaluated. Another topic for future posts will be the "requirements" section of the preliminary title report which is often ignored until right before close of escrow causing delays, failed deals or even law suits. I have a "user's" knowledge of the title insurance products, and I won't attempt to make an exhaustive presentation on this subject on which entire books have been published. Also as time goes on, I plan on giving references to resources available to the public which will remove some of the mystery of real estate law. This blog targets California real estate, although some of the comments may be applicable to other states. Please feel free to comment on or ask questions.</span><br />
<span style="font-family: Times, Times New Roman, serif;"><br /></span>
<span style="font-family: Times, Times New Roman, serif;">Required Disclaimer: This is Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.</span>Kevin Gillespiehttp://www.blogger.com/profile/13891330840808278739noreply@blogger.com0