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The Ground Floor

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Get It Right The First Time: The Implications of Recording a Defective Lis Pendens

Jeff Brown Aya Elalami April 12, 2024

In De Martini v Superior Court, the California Court of Appeal recently held that a claimant cannot record a subsequent lis pendens on the same property in a separate legal proceeding without obtaining permission from the court that expunged the first lis pendens. READ MORE

Be careful what you wish for: Using a license instead of a lease may preclude the use of California’s summary eviction procedure

Jeff Brown November 17, 2023

In Castaic Studios, LLC v. Wonderland Studios LLC, the California Court of Appeal held that when a property owner only licenses its real property to another, the property owner cannot use California's summary eviction process, unlawful detainer, against the defaulting party. Here, Castaic entered into a written agreement by which it granted Wonderland the “exclusive right to use" certain areas of Castaic's commercial property. The agreement specified it was a “license agreement" as opposed to a lease, with Castaic retaining legal possession and control of the premises. The agreement also provided that it was to be “governed by the contract[] laws and not by the landlord tenant laws." READ MORE

Landlords and tenants: Pay close attention to your force majeure provisions

Jeff Brown Aya Elalami May 17, 2023
upscale shopping district

Various legal issues have arisen from the pandemic and its impact on business. One such issue that has arisen is: Does COVID-19, a global pandemic, fall within the protections of a lease’s “force majeure” provision and, therefore, excuse the tenant from paying rent? READ MORE

The best way to keep one’s word is not to give it; “nonbinding” usually means nonbinding

Jeff Brown September 9, 2022
agreement papers

There can be a fine line between an unenforceable agreement to agree and an enforceable agreement with set terms. The Fourth District Court of Appeal reminds us, though, that courts may take parties at their word when the terms of a preliminary agreement state that it is not a binding contract. READ MORE

CA appellate court ‘sounds off’ on neighborly dispute over noisy property

November 29, 2021

In Chase v. Wizmann, the California Court of Appeal affirmed a preliminary injunction that ordered a neighbor to relocate his loud pool and air conditioning equipment to the other side of his house, at considerable expense, before trial. This case reminds real property owners to be neighborly to adjacent property owners. READ MORE

Cannabis company denied arbitration – reminder to avoid conflicting remedies in lease agreements

July 28, 2021
A lease agreement about to be signed

In a lease dispute between a ranch-owner and cannabis company, a California state court of appeal ruled that the arbitration provision included in the lease was not enforceable, as it would nullify conflicting remedy rights granted to the landlords elsewhere in the lease. READ MORE

Commercial landlords: Time to tighten up your lease waivers of liability?

Jeff Brown January 5, 2021
Empty warehouse floor

The California Court of Appeal recently upheld an exculpatory clause which spared the landlord from a tenant’s claim for personal injuries resulting from allegedly defective conditions of the leased premises. The case is a reminder for landlords to go back to their lease forms and make sure that they are getting the most exculpatory protection they can. READ MORE

What real estate parties should consider for letters of intent

Jeff Brown October 22, 2020

As new real estate transactions begin to heat up, Letters of Intent will likely become relevant again. This article briefly describes issues to keep in mind as you begin to get back into the trenches for new deals. READ MORE

Work-out agreements and loan modifications: Put them in writing if the collateral is real property

Jeff Brown October 14, 2020
A person signing a real estate contract

In a recent decision, the California Court of Appeal held that the statute of frauds precluded an investment borrower from alleging there was a verbal commitment that the borrower could refinance or re-amortize a real estate-secured loan with a new repayment period. READ MORE

Trusted advisors: Altered reality - Rethinking retail lease clauses in the COVID era

July 27, 2020
Stores in an upscale outdoor shopping mall

As businesses begin to resume operations, retail tenants and landlords face a stark new reality: Lease terms agreed to in pre- COVID times may no longer be applicable or even reasonable in this new setting. While the coronavirus pandemic made everyone review their leases for force majeure provisions, these three common retail lease provisions may require review and stress testing in this COVID paradigm. READ MORE

Lienholders beware: Must you share the wealth?

Jeff Brown June 10, 2020
house calculator money_650x510

In Zieve, Brodnax & Steele, LLP v. Dhindsa, the California Court of Appeal held a California statute that establishes the priority of payment of proceeds from a nonjudicial foreclosure sale does not extinguish the rights of junior lienholders to surplus sale proceeds. READ MORE

Why plaintiffs should think twice before recording a lis pendens

Jeff Brown May 6, 2020
Commercial real estate building for rent

In Goens v. Blood, the United States District Court of the Southern District of California recently held that commercial tenants cannot record lis pendens where they fail to sufficiently allege a real property claim under California’s lis pendens statute, as opposed to lawsuits that are essentially fraud actions seeking monetary damages with constructive trust allegations appended. READ MORE

Playing the hand you’re dealt: Dealing with force majeure clauses like a Maverick

Jeff Brown April 14, 2020
An illustration of a cowboy riding into a sunset

During the COVID-19 pandemic, among the issues that are being discussed are "force majeure" provisions in various contracts. To attempt to bring a bit of lightness into that discussion, we will discuss a 1961 appellate decision about force majeure in the context of a then-very popular television actor and equally popular television show. READ MORE

California Judicial Council enacts Emergency Rules to suspend eviction and foreclosure actions during COVID-19 pandemic

Jeff Brown April 7, 2020
A high-rise commercial building

Effective April 6, 2020, the California Judicial Council enacted eleven Emergency Rules of the California Rules of Court due to the COVID-19 pandemic. READ MORE

Ghost kitchens: A scary-good real estate opportunity in California

October 7, 2019
Photo of commercial kitchen with chefs blurred from movement

While the concepts of commissary kitchens for food preparation and food delivery are nothing new, the volume and velocity thanks to ecommerce create a challenge for restaurants to keep pace. Ghost kitchens answer these needs, but create unique real estate opportunities for zoning, building code compliance, and licensing. READ MORE

Rest in peace: ROFRs expire once a tenant becomes a holdover tenant

Jeff Brown January 24, 2019
A lease agreement about to be signed

Thanks to a decision from the California Court of Appeals, a right of first refusal contained in a written lease expires when the tenant becomes a “holdover” tenant. Now, tenants must seek specific language in their leases to preserve ROFR privileges. READ MORE

Walk, don’t run: After foreclosing, lenders should pause before evicting tenants in California

Jeff Brown December 26, 2018
illustration of eviction notice

The California Supreme Court has held that a new owner of property obtained through non-judicial foreclosure must perfect title before serving a written notice to quit on the current tenants. READ MORE

In California, ordinances restricting the homeless from sleeping in public can be ‘Cruel and Unusual’

Jeff Brown November 6, 2018
Tents below a highway ramp

After Martin v. City of Boise, prosecuting homeless individuals with no access to alternative shelter for using public spaces could be unlawful. Though the decision is narrow, city governments will have to reevaluate the constitutionality of ordinances targeting the homeless. READ MORE

California fraudsters beware: Protection by ‘integration clause’ less than rare

October 11, 2018
Contract in office setting

A recent ruling clarifying California’s view on exceptions to the parol evidence rule serves as a reminder to fraudsters: don’t count on the rule to keep outside evidence contradicting a contract from entering the court room. READ MORE

Commercial landlords should add a waiver of Civil Code Section 1950.7

Jeff Brown September 26, 2018
Downtown Los Angeles commercial buildings

Waiving Section 1950.7 helps landlords avoid returning portions of security deposits when they could be used to offset anticipated damages after a tenant has abandoned a premises. Without a waiver, options become limited. READ MORE

Enforcing a mechanic’s lien in California? Don’t waive your right to arbitrate the dispute

Jeff Brown June 12, 2018
claim of lien form

If contractors in California want to retain the chance to arbitrate a contractual dispute, they must comply with a state statute when seeking to enforce a mechanic’s lien. Otherwise they’ll be stuck litigating the dispute in court. READ MORE

Lions and tigers and bears, oh my!

Jeff Brown March 7, 2018
Roaring Brüllender Tiger

A California resident was recently denied a Conditional Use Permit to keep as many as five tigers on her property outside of Malibu. READ MORE

Property damage, cannabis production at issue in landlord’s insurance coverage dispute

Jeff Brown January 29, 2018
indoor cannabis production

A federal court ruling from Michigan stresses how important it is for landlords to monitor the activities of their tenants and has provoked discussion about insurance coverage disputes involving businesses engaged in the production or sale of cannabis. READ MORE

Vineyard buyer's fraud claim dying on the vine

Jeff Brown October 6, 2017

This is a rare case in which a “failure to disclose” claim was defeated by a pre-trial summary judgment motion. Even rarer considering that the Court found that the defects should have been disclosed … if the sellers had actual notice. READ MORE

Commercial landlords beware! Time to modify your lease form allowing encumbrance of tenant’s interest?

Jeff Brown August 31, 2017

The California Court of Appeal recently held that a lender that took possession of a defaulting tenant’s premises and then transferred its interest to a third party was not liable to the landlord for future rent. READ MORE

How much is too much? NY AG stops Simon Property from enforcing its 60-mile radius restriction

Jeff Brown August 25, 2017

In shopping center leases, the landlord may agree to protect current tenants with exclusive use provisions, blocking future tenants from competing with the already existing businesses READ MORE

Twist & shout: California appellate court allows reverse veil piercing against LLC

Jeff Brown August 18, 2017
Ground Floor_default blog

The California’s Fourth Appellate District has concluded that “reverse veil piercing” is possible to add a limited liability company to a judgment against the 99 percent owner of that LLC, in a decision that distinguishes itself from the 2008 appellate decision, Postal Instant Press, Inc. v. Kaswa Corp. READ MORE

Building seawall erodes homeowners' rights to challenge conditions

Jeff Brown July 14, 2017

The Court provided the moral of the story: “Landowners who proceed with a project before the merits of their claims have been decided risk a finding that their objections were forfeited.” READ MORE

Video of webinar on ADR, liquidated damages and letters of intent now available

Jeff Brown May 24, 2017

ADR, Liquidated Damages, and Letters of Intent should be considered well in advance when contemplating a possible real estate transaction as they can lead the way to minimizing exposure and maximizing recovery in the event of a dispute arising from the transaction. READ MORE

Arizona case could point way on enforcement of commercial leases for medical marijuana dispensaries

Jeff Brown April 28, 2017

In view of the current enforcement policy of the federal government, the Court of Appeal held that the lease was enforceable, at least for purposes of a damages lawsuit for its breach. READ MORE

‘Home Improvement’ decision may provide tools for drafting, managing CAM in commercial leases

Jeff Brown April 10, 2017
Ground Floor_default blog

The decision lends support to the typical provisions of leases that allow only a shortened period of time for the tenant to object to the landlord's statement of CAM charges. READ MORE

So you think you can avoid California’s anti-jury waiver?

Jeff Brown February 8, 2017

The California Court of Appeal for the First Appellate District in San Francisco recently held that commercial borrowers are entitled to a trial by jury even though they signed loan documents that contained a jury waiver under New York law. READ MORE

‘I’m yours … and yours’: California Supreme Court puts restrictions on ‘dual agents’

Jeff Brown November 30, 2016

The Court concluded that the real estate salesperson owed the parties to that transaction the same fiduciary duties as the broker on whose behalf he acted. READ MORE

New Prop 65 warning rules impose additional burdens on California businesses

November 2, 2016
Ground Floor_default blog

The new Prop 65 regulations materially change the requirements for warnings on products, labels, tags, packaging, and posting of signs for products, and now specifically addresses internet sales. By requiring that this information be provided, Prop 65 is intended to enable Californians to make informed decisions about protecting themselves from exposure to harmful chemicals. READ MORE

California appeals court rejects ‘creative’ sham guaranty defense

Jeff Brown October 11, 2016
shops on Rodeo Drive in Beverly Hills

In what can only be described as pure “chutzpah,” a commercial real estate investment fund argued that it was the alter ego of its property-level SPE to avoid liability under a guaranty. The attempt was rebuffed by a California appellate court. READ MORE

Commercial landlords: Time to tune up your indemnity provisions

Jeff Brown August 24, 2016
mechanic with wrench

The California Court of Appeal recently issued an opinion which reminds us to take another look at the “boilerplate” indemnity provisions in commercial leases. READ MORE

Thompson Coburn to host ethics webinar on confidentiality issues

Jeff Brown May 31, 2016
Ground Floor_default blog

Confusion surrounds the attorney-client privilege. Many think they have it when they do not and even if they do, they fail to appreciate how easy it is to lose. In either case, not enough attention is paid to the possibility that the privilege may be unavailable. READ MORE

Appraisals for commercial lease extensions: A step-by-step guide

Jeff Brown May 3, 2016

We’ll go through the basic steps of an appraisal to determine rent, including when the appraisal process starts, how to pick an appraiser (or appraisers), and how a rent determination is actually made. READ MORE

And in this corner: Judicial referees as alternatives to juries in California

Jeff Brown March 28, 2016

California property owners are no more likely than any other business to opt for judicial reference, but because they are so contract-intensive, real estate disputes have spurred several interesting appellate opinions that in recent years have looked at the benefits — and limitations — of this uniquely Californian option for dispute resolution. READ MORE

Landlords and tenants: To Airbnb or not Airbnb, that is the question

January 26, 2016

Among the objections that governments and regulators offer regarding Airbnb are its ability to undermine landlord-tenant law or subvert rent control ordinances (such as removing tenants for the purpose of getting higher short term rents from short term occupants). READ MORE

Hold who harmless? Be careful in drafting indemnity provisions

December 21, 2015

As deal lawyers know, it’s usually far better to clarify what you want during the negotiation of an agreement — while the parties are relatively amicable — rather than to argue about it when they’re not. Add indemnity to the list of “boilerplate” provisions that should be carefully drafted. READ MORE

Man assumed the risk of injury from chainsaw-wielding psychopathic killer

Jeff Brown December 2, 2015

The Court put forth the classic and simple truth about this case: “Being chased within the physical confines of The Haunted Trail by a chainsaw carrying maniac is a fundamental part and inherent risk of this amusement. [Plaintiff] voluntarily paid money to experience it. It is not the function of tort law to police such conduct.” READ MORE

Litigate or arbitrate: Does it matter?

Jeff Brown November 17, 2015

Jeff Brown of our LA office and David Dick of our St. Louis office discuss the strategic use of mediation, litigation, and arbitration provisions. READ MORE

Can the California A.G. limit those incessant Prop 65 lawsuits?

October 29, 2015

The California Attorney General has proposed amendments to California’s Proposition 65 regulations governing enforcement actions brought by a “private person in the public interest.” READ MORE

Drone users to lawmakers: ‘Should I stay or should I go?’

September 21, 2015

Real estate brokers, agricultural entities and utilities among others have increasingly used drones to photograph, monitor, or inspect properties, with new applications and hardware enhancements being introduced continuously. Clarity regarding just where and at what altitude these drones can operate is a goal easily stated, but as Governor Brown just demonstrated, it is a goal not easily achieved. READ MORE

I will survive: Help your reps and warranties endure with a smart survival clause

August 31, 2015

The desire to protect oneself is human nature. Nowhere is that more obvious than when drafting complex commercial real estate deals, where parties often have conflicting goals regarding liability. READ MORE

Move it or lose it: Relocation provisions in commercial lease agreements

August 20, 2015

Not all tenants are created equal. Shopping center landlords can agree that having a high-end retailer on their roster often beats out the local mom-n-pop shop. But what is a landlord to do when that top retailer comes along after the lease with the local mom-n-pop shop is already inked? READ MORE

Are liquidated damages down the drain in California?

Jeff Brown August 11, 2015

Liquidated damages can provide parties added incentive to perform all types of contracts, including commercial real estate contracts. But are they enforceable in California? The short answer is that they’re presumed to be enforceable as long as they’re not a penalty. READ MORE

Marketing real estate with drones: When can we take to the skies?

August 4, 2015

More and more real estate marketing professionals are utilizing drones to capture dramatic footage of properties listed for sale. In the pre-drone days, brokers needed helicopters — and a big budget. READ MORE

LOIs are nothing to LOL about: A primer on letters of intent

Jeff Brown July 30, 2015

Letters of Intent can be minefields. On the one hand, business people want to use them to tie up a deal. On the other, they don’t want to be bound by them if they want to walk away. READ MORE

Would you like toppings on that lawsuit? Exclusive use provisions in retail leases

Jeff Brown July 23, 2015

To avoid future disputes, the parties should clearly and expressly designate those uses that the landlord cannot allow other tenants to undertake. General, broad descriptions can result in litigation later on, as can uses that are too narrow in their description. READ MORE

Welcome to The Ground Floor

Jeff Brown July 23, 2015
Ground Floor_default blog

Whether you’re traveling the 405, the 101, or the I-80, California is all about commercial real estate. In fact, other than water, many believe the most important legal issues concerning the Golden State are those with respect to the acquisition, management, and disposition of real property READ MORE