The real estate buying and selling process can be complicated for a wide range of reasons in Los Angeles. One common reason for a real estate dispute is a seller’s failure to disclose a defect in his or her property. A seller is obligated to disclose any potential problem to prospective purchasers that may impact the property’s value.

Property owners generally must complete disclosures for any problems of which they are aware. Concealing major defects is deemed illegal. The state of California is particularly detailed about its disclosure requirements.

Because home sellers do not always know about all of the defects their properties might have, it may behoove the potential buyer of a property to have a professional inspect this property. Sometimes the seller may have his or her own inspection done to find out the status of his or her property. If the seller’s inspector brings to his or her attention a problem, the seller must be prepared to disclose it if it has the potential to impact the home’s value.

Sometimes sellers fail to adhere to laws requiring them to disclose serious issues with their homes. In these situations, it is within the right of a person who ends up buying a problem property to seek to hold the seller accountable through the civil court system. An understanding of what facts have to be proved in this type of real estate dispute will likely be essential to succeed in such a court case in Los Angeles and elsewhere in the state of California.

Source: findlaw.com, “Required Real Estate Disclosures When Selling Property“, Accessed on Jan. 12, 2017

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Real estate is a complex area for both a home seller and buyer, but it can be particularly challenging for the buyer. One area in which a real estate dispute may surface in Los Angeles or other parts of California involves construction defects. Typically, these cases are based on contracts between developers and homeowners.

According to the law, the developer is obligated to exercise a reasonable degree of knowledge, care and skill when engaged in building practices. This is defined as the skill and knowledge that building professionals normally employ. The law extends the developer’s duty of care to any party who might foreseeably suffer an injury as a result of construction defects, which includes purchasers of the property.

Homeowners may also decide to sue a developer for a breach of any obligations established in the purchase and sale documentation or in the escrow instructions. A breach of warranty on the part of a developer concerning the condition of the property may also be grounds for litigation. In addition, a developer may be sued for allegedly misrepresenting the quality of his or her construction intentionally, through false ads or other representations.

One of a Los Angeles homebuyer’s worst fears may be hidden construction defects stemming from a developer’s negligence. Fortunately, the homebuyer has rights when this type of real estate dispute occurs. It’s possible to fight for one’s best interests with the right legal help in an effort to hold an irresponsible developer fully accountable for construction defects in California.

Source: findlaw.com, “Legal Liability for Construction Defects“, Accessed on Jan. 4, 2017

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Most entrepreneurs and new business owners will invest in at least minimal coverage when they first start operating their companies. However, like homeowners and drivers, business owners may become complacent too quickly about the kind of coverage they have.

Frequent, if not annual, reviews of insurance coverage can benefit your business. Unfortunately, is easy to put off such reviews because you may want to avoid the hard sell so common with insurance agents. An attorney can also help you identify points of liability for your business and appropriate amounts of coverage.

If your company has grown or changed the kind of services or goods it provides, you may need to adjust the insurance you carry to reflect those changes.

There are many kinds of business coverage available

General business liability protection often isn’t enough. Do you provide guidance to clients as a real estate agent? If so, there is errors and omissions coverage that will protect you from claims that you gave bad advice or made a mistake on the sale paperwork that cost your clients thousands. If you produce physical products, you may need product liability coverage.

As you start hiring workers, you also need to look at what kind of workers’ compensation coverage you carry, as well as your premises liability coverage for visitors to your facilities. Business interruption insurance can also be crucial, as you never know when you may have to cease operations and face diminished revenue while still needing to pay the same monthly bills.

The right coverage will minimize your operational risks

Running a business means investing your time and money to create profit for yourself and any shareholders invested in your company. A lawsuit by an injured worker or a customer who claims the design of your most recent product was defective could devastate your business and even force you to close its doors.

The right insurance coverage will protect you by compensating individuals who claim your business caused them harm and by advocating on your behalf when settling those claims. Reviewing your current business insurance and identifying where you may not have enough coverage can protect you from the financial risks that come from doing business.

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As a real estate investor, you want to lease your properties in a way that is stable and safe for you. You want to maximize the return on your investment, and you’d like to remove as many obligations from yourself as possible.

When designing the leases that you use with your commercial clients, you want to consider the net. The three main types of leases are a single net lease, a double net lease and a triple net lease. What do these mean for your situation?

Who covers which costs

Essentially, all of these leases just determine who has to pay for specific costs related to the building. Your base commercial renters agreement is simply going to say that the individual has to pay a set amount for rent every month, and they have no other obligations beyond that. But you can also expand things in the following ways:

•     Single Net Lease: A single net lease simply means that the tenant has to pay the property taxes and the base rent. The owner still has to cover things like insurance and maintenance.
•     Double Net Lease: A double net lease adds both property taxes and property insurance to the monthly payments. The client is responsible for this so that you, as the property owner, are not.
•     Triple Net Lease: A triple net lease moves the most responsibility to the tenant. In addition to those costs noted above, they also have to pay real estate taxes, property insurance, and the cost of utilities and maintenance on the property.

Different situations call for different types of leases. What’s important is to understand all of the options that you have and what steps to take to use the ones that will be best in your specific situation.

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If you own a rental property, you probably understand that being a landlord comes with its fair share of responsibilities and obligations. Besides collecting the rent, a landlord is also a salesperson, a repairman and a conflict solver. 

Here are some of the obligations that come with being a landlord in California:

Ensure the property’s habitability

It is the job of the landlord to ensure that the rental property is fit for habitation. That means the rental property must be devoid of hazards and defects. The property must also meet all the local and state building and health codes. 

Basically, a livable house should offer the following:

• Protection from elements with a functioning roof, walls, doors and windows
• Safe electrical system
• HVAC access
• Safely maintained floors, stairways and rails
• A working plumbing system

Ensure the safety of the tenants

As a landlord, you want to ensure that your tenants and their properties are safe from crime. You can realize this by taking simple steps like installing security lights in dark areas and providing sturdy locks on doors. 

Basically, preventing crime begins with screening potential tenants before letting them into the property. For instance, checking if a potential tenant has a violent criminal record can help keep other residents safe. 

Property maintenance

Not every property defect is the responsibility of the landlord. For instance, damages occasioned by the tenant should remain their responsibility. However, it is the job of the landlord to ensure that the property is structurally sound and not run down. Remember, ignored repairs are likely to become safety hazards, and this can lead to serious consequences. 

Knowing your landlord obligations can help prevent most landlord-tenant disputes. When disputes do happen, make sure that you obtain experienced legal guidance.

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California has some of the strictest disclosure laws in the country. Along with the typical disclosures of flood risks, environmental concerns and issues with systems in the building, commercial property owners must also provide information on energy efficiency, disability access compliance and more.

In 2015, the SB 1171 law was passed by the California state legislature. This re-categorized real property to include all commercial property. The law applies to selling commercial property and any lease that is more than one year.

California disclosure requirements for commercial property

Failure to disclose the following information about a commercial property can lead to serious issues and even litigation. Some of the key disclosures that must be made include:

•         Water heater bracing
•         Location of the property in a seismic hazard zone or earthquake fault zone
•         Flood hazards and the need for flood insurance
•         Location of a property in a Very High Fire Hazard Zone
•         Wildland/urban interface area
•         Earthquake safety improvements
•         Mold presence

Don’t take chances with disclosure requirements

It’s important to work with someone who fully understands the extensive disclosure requirements in California. It’s also recommended that you over-disclose rather than omitting something that a party may have grounds to make a claim over in the future.

While “as is” provisions in the real estate contract may seem like enough to avoid liability issues, this isn’t always the case. You can’t rely on this to help you avoid issues.

Your role in commercial real estate disclosure

If someone brings a failure to disclose a claim against you, it can cost time and money. You can avoid these situations by disclosing all required issues based on California’s law. Working with professionals to help with this is recommended.

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You may have been told by someone you know not to invest in property because of some problems they had with commercial real estate. 

While you can’t know for certain if you’ll have the same issues, you may be able to resolve some of that tension by separating fact from fiction when it comes to commercial real estate:

1. Myth: It’s better to build than to buy a building

There are many pros and cons when it comes to buying land on which to build, but the same can be said about buying a building. Buying land may not necessarily mean you’ll have an advantage over an already established building. Depending on what you want to use your investment for you might need to consider your own reasons for your purchase. 

2. Myth: Commercial real estate investment is only for the rich

Nearly anyone can invest in real estate – it isn’t just for people with lots of spare money. Unlike rich people, you may need to reach out to a bank or lender to help you invest in real estate. 

3. Myth: It’s too late to invest in real estate

Whether it’s because of the market or because of your age, it’s never too late to invest in real estate. There may be times of the year when it’s better to invest, but real estate values are always going up. 

4. Myth: Legal problems with real estate only occur after a purchase 

Many people who invest in real estate encounter legal problems. These problems may be caused by lenders or sellers. If you’re looking to invest in real estate and avoid legal difficulties, then you may need to reach out for legal help who can provide you with your options and protect your interests.

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Every human being has a right to secure, safe and comfortable accommodation. However, not everyone can afford to own a home. As a result, most people live in rented properties.

Both federal and California laws protect tenants from unfair actions (like race, gender, or religion-based discrimination) from their landlords. Thus, if your landlord discriminates against you on any basis, you need to seek justice and the resulting damages.

Here are warning signs that your landlord (or potential landlord) could be discriminating against you.

Your landlord is asking probing questions

While every landlord has a right to know the individual they are renting their property to, certain questions can be improperly used to block you from renting the property in question. Some of the discriminating questions a landlord can ask while interrogating a potential tenant include:

• Are you planning to have more children?

This question can come in a number of forms. Perhaps, the landlord has concerns about additional children on the property, or they are concerned that maternity leave could impact your finance and hinder your ability to pay rent. Reason notwithstanding, your family situation should never impact your candidacy for the rental property.

• What is your religion?

The potential landlord can ask this question if they are biased towards or against people of a certain religion. However, the question is absolutely inappropriate and could amount to discrimination based on your religion.

Your landlord is making suspicious remarks

Sometimes, a potential landlord can make suspicious comments while discussing the tenancy subject with you. For instance, there is no problem with the landlord telling you that they do not have a vacant unit presently. However, if say this immediately after obtaining sensitive information from you (like your religion or sexual orientation), then this can raise suspicion of discrimination.

If a prospective landlord discriminates against you, it is in your best interest that you take action.

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Have you ever driven past a piece of land and thought, “That would make a great…?” If so, you wouldn’t be the first, and you might not even be the first to enquire if that particular piece of land is for sale and at what price.

The often repeated mantra of “location, location, location” can be misleading when it comes to real estate. While location matters a lot, there is no point in having a great location if you cannot do what you intend with the land. There is a reason so many great-looking plots have not been snapped up and converted into beautiful homes, luxury hotels, high-tech business parks or whatever you are thinking. It’s because doing so is not allowed.

You need to check zoning laws before purchasing real estate

It might be possible to apply for a change to the zoning restrictions when you spot a piece of real estate you like. Yet, if the authorities refuse your request, you could be left with a plot of land you struggle to shift or use.  Even if you eventually succeed, the process could take a long time, tying up your money rather than producing the rapid profit you hoped for.

The price can be a good indicator

If the real estate seems a bargain, it might be because the seller has already tried to change the zoning and failed. They know it cannot fulfill its investment potential.

There is much to consider when looking to invest in real estate. Investing a little more time and money in research before parting with your money increases the chance you invest well.

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When you’re buying a property, you take steps to know all you can about it. You want to be sure that you know about defects that could impact the property’s value or require repairs, because those are costly.

Many sellers do all they can to repair minor issues before selling a home, but some will take additional steps to try to conceal issues that are lying under the surface. They may try to patch cracks in the foundation or paint over damaged wood to hide defects, leading to buyers having problems with the home down the line.

What can a buyer do if the seller failed to disclose defects?

To start with, buyers should know that sellers don’t necessarily know about all defects. For example, if the seller only lived in the property for a few years and didn’t know that a previous owner had hidden away defects, they might not have been aware and able to disclose them to you. This is one reason why you will want to have an inspection on any property you’re interested in purchasing.

If a buyer finds a defect during an inspection, it is much easier to negotiate down the price of the home or to walk away from the sale. If the defects were hidden away and result in damage later on, though, the alternative option may be to sue.

If you plan to sue for defects, you will need to show that the seller knew about or should have known about the problems you’re dealing with. For example, if the seller discussed replacing the sink in the bathroom and you remove it only to find significant damage behind it, you may be able to show that they should have known about that damage and intentionally tried to cover it up. Similarly, if fresh paint chips away and you see damage to the foundation, you may be able to show that the seller tried to cover cracks or damage that quickly appeared again.

Failing to disclose defects could result in a broken contract and may give you the opportunity to sue, so you can get compensated for any financial losses. In some cases, you may also be able to unwind the sale.

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