Archive for the 'Real Estate' Category

Update on Proposed Fines for California Drought Water Usage

California Lawmakers Crack Down in the Face of a Monstrous Drought

For the past four years, the state of California has suffered through one of the worst droughts in history. A historic and unprecedented lack of rain has created the need for some very immediate and systemic changes regarding water usage.

As Governor Brown and state officials urge California residents to cut back, local county and city governments have begun passing ordinances that restrict water usage. These restrictions often ban residents from washing their cars and doing other activities involving water. Some neighborhoods are prohibited from watering their lawns while other neighborhoods have placed residents on a schedule, permitting sprinkler usage on only one day a week.  Droughtful

Thankfully, these restrictions, as well as awareness of the issue, have led to an impressive 35% cut in California’s water usage.

Celebrities Among the Most Egregious Offenders

Many California residents have allowed their lawns to go brown in order to conserve water while others have transformed their yards using zeroscaping. Unfortunately, many of Hollywood’s elite have eschewed the water restrictions and have continued to operate their sprinklers, enjoying lush, rolling lawns while their surrounding neighbors have dead grass.

Each individual water district is responsible for policing its residents. As such, uniform policies have failed to develop. For instance, Las Virgenes Municipal Water District is patrolling wealthy Calabasas neighborhoods for violators and has issued many violation letters to famous residents. Some of these individuals were fined.

However, it appears many water districts are not being vigilant about the issue. In Los Angeles, only 9 people were fined despite thousands of warning letters for violations. In Beverly Hills, where some of the more outrageous violations have occurred (and where the largest yards exist), no fines have been levied yet.

California Spring Usage Limited During Drought

California is home to many natural springs. Water bottle companies like Nestle and Sugar Pine contract with the California government to pump water from the springs for bottling and resale. In January of 2014, the governor announced a state of emergency. In response, the California Water Resources Control Board ordered Sugar Pine Spring Water Company to stop diverting water from the Sierra Nevada spring to its bottling facility. Despite this order and numerous warnings, Sugar Pine continued to divert water and was recently slapped with a whopping $225,000 fine.

Reversing Zombie Foreclosures

As a result of the mortgage crisis and the collapse of numerous banks, many homeowners were threatened with foreclosure. However, many of these homeowners were unaware of their rights and assumed a Notice of Default meant their home was lost to foreclosure. In reality, a Notice of Default is merely the first step to a foreclosure. Abandoning the property before the foreclosure is complete means that the homeowners remain on title to the property for years, even though nobody is living on the property.  Recieveship 1

Many people abandoned their homes under the mistaken belief that their home had been foreclosed, but unbeknownst to them, they remained the record property owner. The scenario when a homeowner abandoned the home, but remains on title, is known as Zombie Foreclosure. Zombie foreclosures have plagued many communities, particularly in lower-income areas.

Why don’t the banks complete the foreclosure? This is a question with no official answer. After the foreclosure crisis, banks were either bankrupt, seized by the government, or were handed $700 billion dollars for their incompetence. The dust has still not settled on many of these loans. There is no official answer to the zombie foreclosure epidemic, but below are three common theories.

  1. Banks are manipulating the housing market by not taken possession of the homes.
  2.  The lack of oversight due to the creation of the private entity known as the Mortgage Electronic Registration System (MERS), which was created to circumvent County Recorder Requirements, allows banks to freely assign loans from one bank to another. This results in an entity like THE BANK OF NEW YORK MELLON FKA THE BANK OF NEW YORK AS TRUSTEE FOR THE CERTIFICATEHOLDERS OF THE CWABS, INC., ASSET-BACKED CERTIFICATES, SERIES 2005-IM3 owning the loan. Figuring out who even has the right to the loan in the above situation is difficult.
  3. Many owners also declared bankruptcy, which prevents banks from foreclosing on homeowners as a result of the automatic stay.

These abandoned homes become drug dens, squatter residences, or become so dilapidated that they burn down. These dilapidated homes attract more serious criminal elements, thereby further harming the surrounding community. What is particularly frustrating in these scenarios is that nobody takes responsibility. The homeowner doesn’t think they own the home, the bank will say it is the homeowner’s responsibility or the bank will claim the loan was assigned to another bank. This leaves everyone pointing the finger at someone else and the community plagued by a dangerous home.  Recievership 2

However, there is a remedy to zombie foreclosures in California known as Health & Safety Receivership. This allows an enforcement agency, tenant, or tenant’s association to request the court to take over a property that endangers the Health and Safety of the surrounding community. If the receivership request is successful, then the court takes the property over and will authorize a private receiver to take control of the property and rehab under court supervision.

This remedy is not the same as eminent domain, because the private receiver takes the risk of managing the property, not the government. If the receiver successfully rehabs and sells the property, then they are paid a court-awarded fee and whatever is left from the sale is given to the bank and homeowner.

This remedy is slowly gaining popularity in California and becoming a more common tool utilized by government agencies, tenants and tenant associations to combat zombie foreclosure.

Impact of California’s Drought on Water Rights

California is in the midst of its fourth year of one of the most severe droughts on record. A drought State of Emergency has been called by Governor Brown and imposed strict conservation efforts statewide. While water conservation efforts have been monopolizing the headlines in most local and state newspapers, the fight over water rights, both surface and ground, have been garnering more and more attention.Empty

Riparian rights determine how water is allocated among those who possess land along its path. Typically, the rights belong to landowners whose property the natural waterway runs, whether it’s a stream, creek, or river. In California, riparian rights are determined by a doctrine known as “prior appropriation.” Under this doctrine, the first person to take a quantity of water from a water source for agricultural, industrial, or household use, has the right to continue to use that quantity of water for that purpose.

In mid-June, the state of California reduced the water usage of farmers with rights to California water dating back more than one-hundred years. In an average year, agriculture use in California amounts to about eighty percent of all of the water consumed on the state. Since the drought began, farmers in the Central Valley have had their water usage drastically reduced incrementally each year.

However, this cut could have devastating consequences for farmers who rely on water to feed their crops and support their businesses. Only once in the history of California have people with the most senior water rights been affected by droughts. Farmers have anticipated that this may happen and as a result have been digging new wells for groundwater. Despite the stress it will put on farmers, California has no choice. Litigation is expected by farmers to fight for their most senior water rights as we move into fall with no rain in sight.

Marijuana Could Destroy California’s Water Supply

While there is no doubting that the California drought affects all of its citizens, environmentalists are scrambling to protect precious and valuable ecosystems that are slowly being destroyed by water diverting tactics of marijuana growers. The marijuana industry in California produces up to seventy-percent of the marijuana consumed in the United States.

However, the marijuana industry remains largely unregulated. There are few protections to ensure that illegal water diversions for marijuana growing farms don’t dry up rivers, destroy salmon and steelhead habitats. Although not legal, the debate over whether or not to legalize marijuana is more amplified as marijuana growers develop extensive plots along California’s most sensitive habitats. A single marijuana plant demands substantial water to grow and since this industry is unregulated, most water to feed the plantations is taken illegally. These diversions have drastically reduced many parts of California, including stretches of the Eel River and many of its tributaries affecting salmon and steelhead habitats, as well as affecting the water supply that wildlife in the area rely on. The diversions have become so extensive that even legal water users in the area don’t have enough water because of marijuana poachers.

While legislation regarding water rights and marijuana growing is making its way through the legislature, environmentalists and concerned citizens are hoping for a more expeditious solution to the problem before marijuana growers permanently destroy sensitive habitats forever.

Enforcing a Verbal Contract to Share Lottery Winnings

What if you entered into an oral agreement with someone to share lottery winnings in the event that you won the lottery? That is exactly what occurred between a Florida man, Howard Browning and his former girlfriend, Lynn Anne Poirier. According to Browning, the former couple verbally agreed in 1991 to share lottery winnings with the other if one of them won. In 2007, Poirier hit the jackpot. Instead of honoring their agreement, Poirier had Browning evicted from the home that they had shared for sixteen years. In 2008, Browning sued her for violation of the oral contract, and alleges that he is entitled to $500,000, or one-half of the $1 million, that she won in the lottery.Couple Break Up

Statute of Frauds

After a jury started to hear evidence in the case in 2012, a judge threw out the case, and an appeals court subsequently agreed. However, in May 2015, those decisions were reversed by the Florida Supreme Court, which ruled that Browning should have a new trial. The Court reasoned that the agreement to divide any future lottery winnings is not required to be in writing because it could be performed within one year. This decision is in line with the Florida Statute of Frauds, which says that a lawsuit cannot be filed for breach of a contract that cannot be performed within one year unless the contract is in writing.

Nevertheless, there are conflicting accounts as to the status of the relationship at the time that the winning ticket was purchased. According to Browning, he and Poirier had dined together just prior to buying the tickets. Poirier, however, tells a different story. She says that she purchased the winning ticket when they had already separated.

While the plaintiff is ecstatic that the court sided with him, he is concerned that the defendant may have already spent the funds. A jury must now determine whether the couple really entered into an agreement to split the lottery winnings, and if they were still together at the time the defendant won the lottery.

I really have to admire the plaintiff’s persistence in trying to claim his share of the winnings. Many people, I’m sure, would have just chosen to move on if their former significant other reneged on their promise to split the winnings with them.

Disabled Homeowners with Service Dogs Denied Homeowners Insurance

Disabled homeowners with pit bulls as service dogs were unable to purchase homeowners policies from Travelers Insurance Company. Travelers has been accused by the Fair Housing Council of Oregon of disability discrimination as a result. While pit bulls have a reputation for being very aggressive and for engaging in dog fighting and attacks on humans, their owners often describe them as being very loyal and sweet-tempered.

Last year, officials from the nonprofit agency directed a phone sting in which “testers” pretending to be people with disabilities made telephone calls to Travelers to obtain quotes on home insurance policies. The testers stated that they were the owners of service dogs that were pit bulls. In every instance, the company’s phone representatives refused to provide them with a quote. In May 2015, the Fair Housing Council filed a federal lawsuit against Travelers in Oregon’s U.S. District Court, and named two of Traveler’s agents, Progressive Insurance Corp., and Purdy & Co., as co-defendants.   pit_bull-dark-300x199

The lawsuit alleges that Traveler’s customer service representatives asked the testers if they owned any pets, to which he replied that he had a service dog for his disability, and that the dog was a pit bull. The representative then said that there was a breed restriction policy to which Travelers must adhere, and that Travelers would be unable to provide homeowners insurance because the breed of dog was a pit bull. When the testers asked if the pit bull policy could be waived or modified, the representative said “no.” The responses were the same even if the assistance animal had no history of dangerous behavior or bites.

The Fair Housing Commission of Oregon alleges that Travelers and its agents are engaging in discriminatory housing practices. By failing to provide homeowners insurance to disabled people because they have pit bulls as service dogs, Travelers is having an adverse effect on the ability of disabled individuals to become homeowners.

Travelers and its agents might say there are other insurance companies from which disabled people with pit bulls might obtain homeowners insurance. If those companies don’t have the same pit bull policy as Travelers, then disabled persons with pit bulls could still purchase insurance despite Traveler’s policy. However, if the policy is industry-wide, then that defense will not help Travelers.