Lunch Presentation to Christian Club at Loyola Law School (Part 3)

Practical 2:

Please God not man

"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." (Luke 12:4-9 ESV). 

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.

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.

"Better is open rebuke than hidden love. Faithful are the wounds of a friend; profuse are the kisses of an enemy." (Proverbs 27:5, 6 ESV).

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. "A man who remains stiff-necked after many rebukes will suddenly be destroyed—without remedy." (Proverbs 29:1 NIV84). 

            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:

"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.'" (Matthew 25:21 ESV).
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Lunch Presentation to Christian Club at Loyola Law School (Part 2)

Practical Point 1: 

Go meal to meal.

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.

Matt. 6:25-34 says: "25“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?26“Look at the birds of the air, that they do not sow, nor reap nor gather into barns, and yet your heavenly Father feeds them. Are you not worth much more than they?27“And who of you by being worried can add a single hour to his life?28“And why are you worried about clothing? Observe how the lilies of the field grow; they do not toil nor do they spin,29yet I say to you that not even Solomon in all his glory clothed himself like one of these.30“But if God so clothes the grass of the field, which is alive today and tomorrow is thrown into the furnace, will He not much more clothe you? You of little faith!31“Do not worry then, saying, ‘What will we eat?’ or ‘What will we drink?’ or ‘What will we wear for clothing?’32“For the Gentiles eagerly seek all these things; for your heavenly Father knows that you need all these things.33“But seek first His kingdom and His righteousness, and all these things will be added to you. 34“So do not worry about tomorrow; for tomorrow will care for itself. Each day has enough trouble of its own."

 Law School, the bar and much of life is more stress control, perseverance and time management vs. intellect and raw knowledge.
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Lunch Presentation to Christian Club at Loyola Law School (Part 1)

Three thoughts which I wish had been shared with me when I was going to school here, one more theoretical, and two practical.

Theoretical:

What on earth are you here for?

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.

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:”


“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...”
“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.
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.


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Sufficient Legal Descriptions

An 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 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 …"
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Micro-Lending and Missions

I 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 organization 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.
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Virtual Notary - NOT IN CA

See the following release from the California Secretary of State before paying for an online notary.

http://www.sos.ca.gov/business/notary/customer-alert.htm

Notaries are pretty accessible. Until there is a clear safe harbor for this kind of notarization, don't risk it.
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.

Negotiation and the Bible

I once wrote to a client when he was negotiating with someone on a commission:

"…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:

“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.

“8 Even a fool is thought wise if he keeps silent, and discerning if he holds his tongue.” Prov. 17:28.

“A gentle answer turns away wrath, but a harsh word stirs up anger.” Prov 15:1.

“It is a trap to dedicate something rashly and only later to consider one’s vows.” Prov. 20:25.

“Where there is no guidance, a people falls, but in an abundance of counselors there is safety.”  Prov. 11:14.

“‘It’s no good, it's no good!’ says the buyer-- then goes off and boasts about the purchase.” Prov. 20:14.  A principle of economics is that a person’s actions are better indicators of belief/values than his or her words.

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."

Perhaps one of the greatest examples of negotiation is between Abraham and God on the destruction of Sodom related in Genesis 18:22-23.  Abraham starts out with: “Will you indeed sweep away the righteous with the wicked?  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?  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?”  God concedes that he would not destroy the city if 50 righteous could be found in it.  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.  Much has been written on this interaction, and I wouldn’t attempt to add any more insight to those discussions.  I do observe, however, some interesting dynamics at play in this story.  The bargaining power between God and Abraham was obviously unequal.  Abraham knew who he was negotiating against, and his values.  He reminded God of those values and worked respectfully and tactfully toward the desired goal.  He also avoided the head on conflict and used more questions than statements.

Can we extract any principles from these?  Here are some, but I would love to here your thoughts:

• 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.
• Listen more than talk.
• Avoid head to head conflicts.
• Ask a lot of questions.
• Take time for reflection and obtaining advice before making a commitment.
• Get good advice before making a commitment.
• Keep in mind the long term relationship more than just the immediate transaction.
• Commit to a win-win or no deal strategy.
• Remember to question everything that the other person says keeping in mind that their actions are a better indicator of belief than are words.

New California anti-deficiency provisions effective January 1, 2011

Effective 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.


Cal Code Civ Proc § 580e (2010)

§ 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



(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.

(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.

(c) This section shall not apply if the trustor or mortgagor is a corporation or political subdivision of the state.


History:

Added Stats 2010 ch 701 § 1 (SB 931), effective January 1, 2011.

DEERING'S CALIFORNIA CODE ANNOTATED
Copyright © 2011 by Matthew Bender & Company, Inc.
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Office Vacancy Rates in Inland Empire

One 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.

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.

http://www.topix.com/city/redlands-ca/2009/09/vacancy-rate-reaches-43-percent-for-redlands-office-space

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How to read a preliminary title report

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.

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