Important Information for Commercial Landlords Regarding Passing Through LLC Taxes and Fees as Common Area Expenses
In Tin Tin Corporation v. Pacific Rim Park, LLC, the California Court of Appeal (6th District) held that a landlord could not pass through LLC Fees and Taxes (“Fees”) to tenants as “Common Area Maintenance Charges” under the definition of “Real Estate Taxes” since such Fees were not costs or fees related to the ownership and operation of the project or the shopping center, but rather were voluntary costs of doing business solely for the personal benefit and protection of the landlord.
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Landlords May Be Liable to Their Tenants for Failure to Limit Second Hand Smoke in the Outdoor Common Areas of a Residential Apartment Complex
In Birke v. Oakwood Worldwide, the California Court of Appeal, (2nd District) reversed the trial court’s sustaining of a demurrer without leave to amend on plaintiff’s claim for public nuisance arising out of the failure of the landlord to limit second hand smoke in the outdoor common areas of a residential apartment building. The Court of Appeal held that the First Amended Complaint sufficiently plead a cause of action for public nuisance to withstand a demurrer.
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The Sale of Parcel of Land That Is Not a Legal Parcel under the Subdivision Map Act is Unenforceable Unless the Contract to Sell the Property is “Expressly Conditioned” Upon the Approval and Filing of a Final Map
In Sixells, LLC v. Cannery Business Park et. al., the California Court of Appeal, (3rd District), upheld the trial court’s sustaining of plaintiff’s demurrer without leave to amend on the ground that the purchase and sale agreement of real property that plaintiff was attempting to enforce was void at its inception because it violated the Subdivision Map Act’s prohibition of the sale of a parcel of real property until a parcel map has been filed.
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Scammed: How Arbitration Can Lead to the Courtroom it's Supposed to Avoid
When Los Angeles Attorney Kent Mouton received a fax from the Southern California Arbitration Association (SCAA) in late January 1996 he felt utterly confident of its contents. Less than two weeks earlier he had appeared at an arbitration on behalf of a commercial property landlord to resolve a dispute with one of the tenants, Omni Medical Centers. Omni, an alcohol rehabilitation facility, claimed that the landlord owed money for tenant improvements and for a penalty assessed against the tenant by a contractor.
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Mortgage Broker Indemnity Agreements Do Not Violate California Anti-Deficiency Law
In Trust One Mortgage Corporation v. Invest America, the California Court of Appeal (4th District) decided that a non-resident (Georgia) mortgage broker was liable to a California (Irvine) mortgage lender for indemnity under the broker agreement where the loan was foreclosed upon in Georgia and the property was sold for substantially less than the loan.

In reaching its decision that the trial court properly granted the lender's motion for summary judgment, the appellate court held that (1) California law, rather than Georgia law, applied since the broker agreement so stated and the lender was based in California, (2) the indemnification obligation did not transgress California's anti-deficiency law (generally prohibiting a lender from seeking a deficiency judgment from a borrower following a non-judicial foreclosure or where the loan is a purchase money loan.

The Court discussed the difference between an indemnity agreement and a guaranty and why the former would not be construed as an attempt to get around the anti-deficiency law.

This case will surely be important to those mortgage lenders here in California (whether or not the property is located in California) since the case provides a lender with greater security for realizing a full recovery when the property is foreclosed upon. Mortgage brokers and those advising brokers or lenders are well advised to make sure that they fully understand their Broker agreements and that they reflect what the parties intended under the indemnification clause.
G035111 (Super. Ct. No. 03CC14762)
TRUST ONE MORTGAGE CORPORATION v. INVEST AMERICA MORTGAGE CORPORATION et al.

 

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