Real Estate Archives - Gupta Evans and Ayres

When is a Broker Entitled to his Commission Fee – An Examination of the ‘Procuring Cause’ Requirement in California

January 19, 2022/in All Blog Posts, Corporate Litigation, Real Estate/by Dylan Contreras

Most, if not all, California real estate brokers (and agents) earn a living by helping people buy and sell homes. Brokers are often paid on a commission basis, usually 2%-3% of the sales price, and do not enjoy the luxury of a steady, bi-weekly paycheck. Given the “feast or famine” nature of the industry, brokers often find themselves in a commission fee dispute with another broker or their client.

In California, a real estate broker earns his commission fee when he produces a “ready, willing, and able” buyer to purchase the property. The broker must also be the “procuring cause” in effectuating the sale. Most brokers, agents, and lawyers are familiar with the former requirement—we have all heard that phrase before. However, the “procuring cause” element is often overlooked and misunderstood amongst real estate professionals. Although the California Association of Realtors (“C.A.R.”) has released helpful guidelines and even included these requirements in its model rules, confusion remains as to what “procuring cause” means. This blog article fills that void by exploring California’s case law on the ‘procuring cause’ requirement.

Ready, Willing, and Able – A Brief Summary

Under California law, a broker has satisfied the ready, willing, and able requirement when he has produced a buyer willing to purchase the property for the price and terms specified by the seller. (See Steve Schmidt & Co. v. Berry (1986) 183 Cal.App.3d 1299, 1305-06.) The buyer doesn’t need to make an offer to purchase the home, but an offer does indicate that the buyer is ready and willing to buy the home. (See Martin v. Culver Enterprises, Inc. (1966) 239 Cal.App.2d 925, 929.) In addition, the prospective purchaser must have the financial capability to purchase the property, such as the necessary capital, or is pre-approved for a home loan. (See Steve Schmidt, 183 Cal.App.3d at 1305-1306.).

In Steve Schmidt, the broker satisfied the ready, willing, and able requirement because the buyer possessed sufficient funds to purchase the property or, at a minimum, could obtain a loan to finance the transaction. In comparison, in Park v. First American Title Co. (2011) 201 Cal.App.4th 1418, 1426, the buyer was unable to purchase the property, which meant that the broker was not entitled to his commission fee. The buyer did not produce any evidence that indicated he had the financial capability to close the transaction, such as pay stubs and bank statements, nor had he been pre-approved for a home loan. The main takeaway is that a broker satisfies this first requirement if the buyer is serious about purchasing the property and has the financial wherewithal to do so.

Procuring Cause Requirement

The National Association of Realtors (“N.A.R.”) defines procuring cause as the “uninterrupted series of casual events, which results in the successful transaction.” C.A.R. has adopted N.A.R.’s definition and baked the procuring cause requirement into its Multiple Listing Services Rules (“M.L.S. Rules”). M.L.S. Rule 7.13 states that a buyer’s-broker’s offer is accepted by the selling broker “by procuring a buyer which ultimately results in the creation of a sales or lease contract.” The N.A.R.’s and M.L.S.’s respective definitions of procuring cause derive from the century-old landmark case of Sessions v. Pacific Improvement Co. (1922) 57 Cal.App. 1.

In Sessions, the plaintiff-broker was employed by the defendant-seller for the sole purpose of selling a shipping yard located near the San Francisco Bay. The plaintiff-broker completed all of the due diligence associated with the sale, such as obtaining the necessary maps and surveys and obtaining a permit to dredge the shipping yard, among other things. After the plaintiff-broker left his employ with the defendant-seller, he provided tract maps to the parties and even helped resolve a drainage issue on the shipping yard. The defendant-seller ultimately closed the transaction at the $1 million purchase price plaintiff-broker had previously proposed; however, the plaintiff-broker was not paid his commission fee.

In reviewing these facts, the California Supreme Court issued the ironclad rule that California Courts rely on to this day: a broker is entitled to his commission fee when he “set[s] in motion a chain of events, which, without a break in their continuity, cause the buyer and seller to come to terms as the proximate result of his peculiar activities.” (Sessions, 57 Cal.App. at 20.) The Supreme Court found that the plaintiff broker was an integral part of the sale because he had “performed the most effective and. . . .hardest and most expensive part of the whole undertaking.” (Id. at 32.) The Court concluded that the plaintiff-broker was entitled to his commission fee for his efforts in helping effectuate the sale of the shipping yard. (Id.)

Although Sessions was decided during the roaring twenties, California Courts have continuously relied on the case. For example, in Duffy v. Campbell (1967) 250 Cal.App.2d 662, the plaintiff-broker was the seller’s agent. The plaintiff-broker introduced the buyer to the seller, negotiated the sales price and contract terms, and even opened an escrow account for the parties. During the escrow period, the buyer and seller held a meeting at the exclusion of the plaintiff-broker and reduced the sale’s price by the amount of the broker’s commission fee. In addition, the parties conveniently closed the sale of the home after the last day the broker could claim a commission fee under the listing agreement.

The Court held that the plaintiff-broker was the procuring cause in effectuating the sale. (See generally Duffy, 250 Cal.App.2d at 665-57.) Akin to Sessions, the plaintiff-broker did all of the heavy lifting. He introduced the parties, negotiated the sales price, and even opened an escrow account for the parties. (Id.) The fact that the parties amended the agreement, principally to exclude the plaintiff-broker from the transaction, did not preclude the plaintiff-broker from collecting his commission fee. (Id. at 668.)

Although Sessions and Duffy may provide a sigh of relief to a broker currently involved in a commission fee dispute, it is important to examine cases in which the Court found that the complaining broker was not the procuring cause.

In Westside Estate Agency, Inc. v. Randall (2016) 6 Cal.App.5th 317, the plaintiff-broker made a $42 million offer for a Bel Air home on behalf of his clients. The offer was rejected, but the plaintiff-broker continued to negotiate and exchange offers with the seller’s broker. After the seller conditionally accepted the plaintiff-broker’s offer, the buyer contacted his attorney for additional advice and told the plaintiff-broker to cancel the deal. The plaintiff-broker did not submit any more offers for the buyer. Three months later, the buyer purchased the property for $1.25 million more than the plaintiff-broker’s original offer and used their attorney as the acting broker. The plaintiff-broker sued, claiming that he was entitled to a commission fee based on the new purchase price.

The Court disagreed and held that the plaintiff-broker “merely put the prospective buyer on track to purchase the property,” which did not entitle him to his commission fee. (Westside Estate Agency, Inc., 6 Cal.App.5th at 331.) The Court found that the plaintiff-broker’s efforts, albeit helpful, were too attenuated from the closing date to award him a commission fee because the transaction closed approximately three months after the buyer told the plaintiff-broker to cancel the deal. Moreover, the buyer purchased the home on different terms than those initially negotiated by the plaintiff-broker. (Id.)

In Schiro v. Parker (1955) 137 Cal.App.2d 503, the Court reached a similar conclusion as Westside Estate Agency, Inc. In Schiro, the property’s listed sale price was $366,000. The plaintiff-broker represented the buyer and submitted two offers at $320,000 and $325,000, both of which the seller rejected. The Plaintiff-broker later learned that the seller was inclined to sell the property for $330,000 or $335,000. The Plaintiff-broker communicated this information to the buyer, but the buyer chose not to submit another offer to the seller. A few weeks later, the buyer met with a separate broker, or the closing-broker, and told him that he thought the “deal was off.” Acting at the buyer’s direction, the closing-broker made two offers to the seller, and the seller accepted the closing-broker’s second offer for $330,000.

Based on these facts, the Court held that the plaintiff-broker was not entitled to his commission fee. The Court focused on the buyer’s state of mind in reaching its decision. The Court was persuaded by the fact that the buyer thought the “deal was off,” and he was, therefore, “free to believe that [plaintiff-broker] was unable to procure an acceptable offer from the seller.” (Schiro 137 Cal.App.2d. at 507-08.)

The holdings in Westside Estate Agency and Schiro teach us the Courts will examine multiple factors when determining whether the complaining broker was the procuring cause in effectuating the sale. In Westside Estate Agency, Inc., the Court focused on the fact that the plaintiff-broker’s efforts were too attenuated from the closing date to be considered the procuring cause. On the other hand, in Schiro, the Court’s relied on the buyer’s beliefs and state of mind concerning the transaction and his relationship with the plaintiff-broker.

There are noticeable factual differences in the case in which the broker was the procuring cause (i.e., Sessions and Duffy) and the cases in which the Court found the broker was not (i.e., Westside Estate Agency, Inc., and Schiro). In Sessions and Duffy, the plaintiff-brokers completed all of the major tasks related to the sale, and their efforts were closely related to the transactions in time and purpose. In comparison, in Westside Estate Agency, Inc. and Schiro, the brokers’ actions were too attenuated from the transaction (i.e., Westside Estate Agency, Inc.) and were not a significant factor or cause of the buyer and seller completing the sale.

The C.A.R. has adopted the case holdings described above and created four categories of factors to guide brokers, arbitrators, and courts in determining whether a broker was the procuring cause in the transaction. The four categories are outlined below:

Connection to the Transaction: These factors focus on who showed the property to the client, made offers on the client’s behalf, the amount of time that elapsed between the intro broker’s efforts and the sale of the property, and the services each competing broker provided. These factors were discussed in Westside Estate Agency, Inc., Sessions, and Duffy.
Buyer’s Choice: This set pertains to the client’s choice between brokers and his/her state of mind as to who was representing them. This factor was central to the holding in Schiro.
Broker’s Conduct: This category relates to the steps the competing brokers took to secure their commission fee and relationship with their clients. In other words, did the closing broker ask the seller if he/she had engaged with another broker? Did the intro-broker know that his/her client was attending open houses on their own? And did the intro-broker tell his client to inform other brokers that he/she was already represented?
Other – Catch-All: This set solely relates to whether any contractual agreements existed between the broker and the client, such as a Buyer-Representation Agreement.

It is important that California real estate brokers and agents keep these factors, as well as the cases discussed above, in mind when negotiating a sales contract on behalf of their client(s). Any ambiguity on who is entitled to a commission fee may negatively impact a broker’s livelihood and result in an arduous and time-consuming litigation process. Contact a California real estate attorney if you or another agent are involved in a commission-fee dispute.

The materials available at this website are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this web site or any of the e-mail links contained within the site do not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

Author: Dylan Contreras

AirbnBe Careful What You Ban: The Coastal Commission’s Broad Authority Over Short-Term Rentals in California

January 18, 2022/in Real Estate/by Chris Evans

Short-term rentals have been, and continue to be, a polarizing topic among residents of many California neighborhoods. This is particularly true in the beach and vacation communities along the California coast. The proliferation of short-term rentals in these areas has led to short-term rental bans regularly springing up to curb the side effects of what many neighborhoods perceive to be mini-hotel communities. Other property owners, on the other hand, resist these bans to take advantage of the revenue stream that companies like Airbnb and VRBO have made possible. In fact, here in San Diego, a short-term rental ban that we discussed over three years ago only just recently reached an apparent conclusion via a compromise between the relevant factions.

While these debates will undoubtedly persist and create uncertainty in the short-term rental industry, a semblance of predictability can be expected from the not so invisible hand operating throughout these communities—the California Coastal Commission (the “Commission”) and its enforcement of the California Coastal Act (the “CCA”).

Now, you may be asking yourself the obvious follow up question: how does a state agency whose mission is to “protect” and “enhance” the California coast get involved in short term rental bans? The answer is simple: broad interpretation. The Commission inserts itself into these short-term rental bans under the theory that it has authority over such ordinances because the bans constitute a “development” within the coastal zone, as defined in the CCA. As a result, such ordinances must adhere to the requirements of the CCA as applicable to other developments. Namely, the acquisition of a coastal development permit from the Commission for any “development” (read: rental bans) in the coastal zone. For reference, a map of California’s Coastal Zone by county can be found here.

The term “development” may be misleading as it often connotes significant, non-minor changes to the land (i.e., building an apartment complex or hotel). In reality, for purposes of the CCA, the term “development” is defined to include any changes in the density or intensity of use of land and changes in the intensity of access to water, such as simple lot line adjustments,[1] fireworks displays[2] or even putting up a sign[3]. Simply put, courts have interpreted the term broadly to encompass any impediments to access, not merely physical alterations, and the rise of short-term rental bans is another such impediment. In other words, the Commission maintains it has authority to interfere with short term rental ordinances because it is an extension of the Commission’s authority to protect affordable access to the California coast, which access is infringed upon by way of short-term rental ordinances because such ordinances impose monetary barriers to beach access.

As could be expected, the breadth of authority assumed by the Commission has been tested several times in the legal system. Most notably in Greenfield v. Mandalay Shores Community Assn. The Greenfield case was a 2018 case in which the Second District Court of Appeal held that an Oxnard homeowners’ association ban of short-term vacation rentals changed the intensity of use and access to single-family residences in the coastal zone and must be approved by the city and Coastal Commission. The court determined that a “development” does not necessarily need to be a physical barrier but can also include monetary barriers that change the intensity of use and access to single family residences in the coastal zone.

This line of reasoning was again tested—and expanded—last year in Kracke v. City of Santa Barbara and upheld. On May 4, 2021, the Second District Court of Appeal affirmed a trial court decision, in Kracke v. City of Santa Barbara (2021) 63 Cal.App.5th 1089, enjoining the City of Santa Barbara’s enforcement of a short-term vacation rental ban in the coastal zone, through proactive enforcement of existing zoning regulations, unless it obtains Coastal Commission approval or a waiver of such requirement. The underlying “ban” in Kracke stemmed from the Santa Barbara City Council’s direction to regulate short-term rentals as hotels under the city’s zoning code. Because the zoning code did not permit hotels in most residential districts, the city’s action was effectively a ban on short-term rentals in most residential areas. As a result, the number of short-term rentals in the coastal zone dropped drastically from 114 to 6. The owner of a company that managed short-term rentals filed a petition for writ of mandate challenging the city’s new policy. Relying on Greenfield, the Court in Kracke explained that although the City, rather than a private entity (the HOA in Greenfield), imposed the coastal short-term vacation rental ban, it was also accomplished without the Commission’s input or approval. The City cannot act unilaterally; rather, as in Greenfield, “[t]he decision whether to ban or regulate [short-term vacation rentals] in the coastal zone is a matter for the City and the Commission to decide” and the reduction in the number of short-term rentals in the coastal zone was inconsistent with the Coastal Act’s goal of improving the availability of lower cost accommodations along the coast.

The Court’s decision in Kracke hammers the fact that the Commission maintains broad authority and discretion over local policies that seek to impede access to the coastal zone, whether physically or monetarily and regardless of whether such policies are passed by private (HOAs) or public entities (cities and counties). In short, if a public or private entity wants to adopt such a policy, then it unavoidably must comply with the CCA and be approved by the Commission.

It would appear easy to say that the Commission has an unwavering desire to strike down any and all short-term rental ordinances. However, when one looks at the cases above, it becomes clear that the problem was not necessarily the ordinance, but rather the way in which the private entity (the HOA in Greenfield) or public municipality (the City in Kracke) imposed their bans. That is, without the Commission’s involvement.Communities and cities run into issues, when they side-step the Commission entirely, avoid the permit process mandated under the CCA and, instead, try to rush a short-term rental ban into action. The Commission even went so far as to issue a memo in 2016 to give guidance to the public and local legislatures about how the Commission views the short-term rental debate and how the interests of all affected can be balanced. For instance, while the Commission does not mince words in stating it does not support “blanket vacation rental bans” under the CCA, the Commission provided a list of provisions that could be included in a short-term rental ordinance that would likely allow the ordinance to pass muster under the Commission’s enforcement of the CCA. More importantly, the Commission approval process is an iterative process wherein the Commission and the municipality in question can confer and work together to develop an ordinance that is agreeable to all involved.

To that end, multiple California cities have successfully implemented short-term rental bans, within the coastal zone of California, after gaining the requisite approval and permit from the Commission. In October 2020, the Commission approved the short-term rental laws of Laguna Beach, California. This ban limited the geographic area in which short-term rentals could exist and required short-term rental operators to apply for and receive permit. Similarly, as of last year in September 2021, the Commission was in the process of reviewing short-term rental legislation from the City of Malibu wherein Malibu legislators were working with Commission staff to address any suggested modifications to ensure that the ordinance complies with the CCA. Finally, with the long-awaited passage of San Diego’s short-term rental ordinance last April, San Diego will now have its own showdown with the Commission to obtain Commission approval prior to the law taking effect this July.

While short-term rental bans may come and go, the broad powers of the Commission over the California coast are not going anywhere. Based on this sweeping authority, the Kracke case and the treatment of neighboring cities, one truth remains irrefutable: if a California city or neighborhood want to pass a short-term rental ordinance with any legal effect, such entities should aim to collaborate and work with the Commission, not against it.

Author: Chris Evans

Landlord’s Limitations in Preventing Tenant’s Sale of Business

October 25, 2021/in All Blog Posts, Real Estate/by John Ahn

Landlord-tenant relationships can be difficult. What should be a relatively simple relationship based on contractual obligations often turns sour. To make matters worse, COVID-19 has created a litany of financial problems worldwide which has further strained already stressful situations. Due to the pandemic, many small businesses have struggled to make rent if not already completely shuttered. Some business owners have been able to successfully sell their business or find a new lessee to take over their tenancy to make ends meet. However, some business owners, due to unreasonable landlords, have been unable to sell their business and are stuck in a strange predicament where they are seemingly forced to slowly bleed out money.

This article will explore how much power a landlord has in preventing the assignment of a tenant’s lease.

I recently encountered this specific issue with two prospective clients as they were hoping to offload their business and move on with their lives. Both of these clients each owned and operated a restaurant in the same building with the same landlord. However, despite their best efforts to work with the landlord and having found viable assignees with solid business plans, the landlord simply refused without any good reason. The only complaint the landlord presented to these tenants is that he did not trust the potential assignees. It is difficult enough to find someone to buy your business and take over your lease, but it has unquestionably been a struggle during the pandemic. Tenant one and tenant two—over the course of twelve and fifteen years, respectively—had dutifully and timely paid rent and continued on with their respective businesses despite other alleged inequities on behalf of the landlord. However, the landlord in this case likely found the two existing tenants to be very reliable sources of income and refused to take on the uncertainty of new tenants.

Limitless Discretion?

If the situation above seems unreasonable, you are likely not alone. However, landlord’s do not have unmitigated discretion and cannot prevent the sale of a tenant’s business without good reason or a provision in the lease restricting transfer. In fact, a tenant’s right to assign her interest in the lease remains unrestricted unless the subject lease includes a restriction. (Cal Civ Code § 1995.210.) Conversely, the lease may include restriction provision which may absolutely prohibit transfer. (Cal Civ Code § 1995.230.) In either of these situations, the answer is fairly cut and dry; transfer may be fully prohibited or wholly unrestricted depending on the language of the lease.

But what if the restriction provision requires a landlord’s consent? Does the landlord have full control of the outcome of a tenant’s request to assign the lease? The courts have discussed this issue at length prior to codifying some of the rulings into law.

For instance, the court in Cohen stated that the duty of good faith and fair dealing prohibits landlords or lessors from arbitrarily or unreasonably withholding consent to an assignment. (Cohen v. Ratinoff, 147 Cal.App.3d 321, 329 (1983).) A lease is generally considered both a leasehold conveyance and a contract. (Medico-Dental etc. Co. v. Horton & Converse, 21 Cal.2d 411, 418 (1942).) Because a lease is also a contract, “there is an implied covenant that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract, which means that in every contract there exists an implied covenant of good faith and fair dealing.” (Universal Sales Corp. v. California Press Mfg. Co., 20 Cal.2d 751, 771 (1942).) “This covenant not only imposes upon each contracting party the duty to refrain from doing anything which would render performance of the contract impossible by any act of his own, but also the duty to do everything that the contract presupposes that he will do to accomplish its purpose.” (Harm v. Frasher, 181 Cal.App.2d 405, 417 (1960).)

Arguably, being able to sell one’s business for a profit is an eventual fruit of a contract. As such, the implied covenant of good faith and fair dealing protects a tenant’s right to assignment of a lease. Although this right is not absolute, assignments are specifically allowed whenever there’s prior written consent from the lessor. (147 Cal.App.3d at 329.) “Accordingly, we hold that where, as here, the lease provides for assignment or subletting only with the prior consent of the lessor, a lessor may refuse consent only where he has a good faith reasonable objection to the assignment or sublease, even in the absence of a provision prohibiting the unreasonable or arbitrary withholding of consent to an assignment of a commercial lease.” (Id. at 330.) Some examples of a good faith reasonable objection include the “inability to fulfill terms of the lease, financial irresponsibility or instability, suitability of premises for intended use, or intended unlawful or undesirable use of premises.” (Id. at 329.) This reasoning was repeated in Schweiso v. Williams, 150 Cal.App.3d 883, 886 (1984) and in Kendall v. Ernest Pestana, 40 Cal.3d 488, 497 (1985) before being codified into law as Cal Civ Code §§ 1995.210-1995.270.

A key takeaway here is that in a situation where the existing lease contains a provision prohibiting the assignment of a lease without the consent of a lessor, the lessor needs to act reasonably in withholding consent. This presumption of reasonableness is what allows for freedom of contract between parties of commercial real property leases as intended by Cal Civ Code §§ 1995.210-1995.270. Determining whether the lessor is unreasonable is a question of fact, and the outcome will depend on whether a lessor’s withholding consent was objectively unreasonable. (Moore v. Wells Fargo Bank, N.A., 39 Cal.App.5th 280, 291 (2019).) Going back to the facts of the two tenants above, if the lessor refused consent because he simply did not trust the potential assignees—despite said assignees allegedly having solid business plans, good credit histories, or whatever else positive attributes—the tenants might each have a strong case to show the lessor is being objectively unreasonable. The burden to prove that will ultimately lie on each tenant and the outcome will depend on the facts surrounding the withholding.

It is also important to note that Cal Civ Code § 1995.230 allows for lease provisions where a tenant may be absolutely prohibited from transfer. (Cal Civ Code § 1995.230; See also Harara v. ConocoPhillips Co., 377 F.Supp.2d 779, 787 (N.D.Cal. 2005); “A lease term actually prohibiting transfer of the tenant’s interest is not invalid as a restraint on alienation.” Cal Civ Code § 1995.230.) In light of this, it is imperative that you carefully review the lease before signing to make sure you haven’t unintentionally placed yourself in a bind.

Author: John Ahn

What Senate Bills 9 & 10 Mean for Attorneys in San Diego

October 12, 2021/in All Blog Posts, Corporate Litigation, Real Estate/by The Gupta Evans & Ayres Team

Unless you inherited your house from your grandmother (and keep a very very low profile), you know that the cost of real estate in California has been skyrocketing for decades.

Not even COVID could stop the real estate bubble, in fact, because many people didn’t want to move during the pandemic, it decreased the supply while the demand never slackened.

Immediately following the recent failed gubernatorial recall, Gavin Newsom put Senate Bills 9 & 10 on the CA Senate floor to help address the housing crisis in California.

As defined in a recent article in the NY Times:

“S.B. 9 allows duplexes to be built in most neighborhoods across the state, including places where apartments have long been banned.
S.B. 10 reduces environmental rules on multifamily housing and makes it easier for cities to add high-density development.”

Can you hear that? It’s the sound of people’s heads exploding.

San Diego is a big small town, you live here, you know. Neighborhoods as tony as Del Mar still have bungalows with beach views held onto by families who bought in the late ’60s and aren’t going anywhere. Housing prices have skyrocketed in the past 2 years with the median cost to buy a home topping $750K in 2021 and estimates saying the price will reach $1M next year.

So, What do Senate Bills 9 & 10 mean for attorneys in San Diego?

In theory, SB 9 would allow a family on an acre or 2 of land to build a casita, rent it out to a couple, make some income to pay their mortgage and in doing so also offset the housing shortage. In practice, developers are coming in, sweeping up family-owned properties and turning them into multi-unit rentals in areas like Clairemont Mesa and other suburban middle-class tracts that have not seen this kind of development since the 1950’s when they were first built up offering middle-income American’s a piece of the American dream.

SB 10 could allow more permitted buildings with less red tape to be built, easing the lengthy process of permits and ecological offsets to structures created in urban areas. Requirements for zoning changes can drive the cost of construction way up and delay projects that build housing in urban areas by months or in some cases even years which in turn raises the rent asked of those properties once they are complete. SB 10 should abate some of that and allow a streamlined route to more high-rise housing in areas like Hillcrest and UTC. In practice, those builders who began projects before SB10 will be at a disadvantage to those who are not required to adhere to the same rules, putting them at a competitive shortfall and potentially paving the way for lawsuits.

The US is a litigious society.

When we feel slighted, we sue. These new regulations in the San Diego housing market are sure to stir up their fair share of lawsuits, challenges, and infighting among developers and old school city residents.

Traffic, pollution, resources like grocery stores, schools, hospitals, urgent care clinics, gas stations, all will be affected by the tripling or more of the population in any one area. From a development perspective, the 2 bills go hand in hand very well allowing more units to be developed with less red tape and city interference.

So what should you beware of if your client is investing in a multi-family property newly allowed by SB’s 9 & 10?

How can you protect them from unnecessary litigation and headache down the road while still encouraging their CRE portfolio’s growth? One step you can take with little to no effort is to do a background check on the players involved. [WE CAN HELP WITH THAT]. If your search comes up with bankruptcies, charge-offs of debt, lawsuits for the past few decades, you’ll know the kind of person your client is getting in bed with and can triple-check those contracts to cut out any loopholes. On the other hand, if it comes back clear, it may just mean, they’re new at this game, so it’s probably still a good idea to check for loopholes in those contracts and investment disclosures.

Whether you fall on the side of the single-family homeowner who says, “not in my backyard” or the young couple looking to get their own place who wonder, “what can I afford?” or the developer who is looking to turn a profit and in doing so offset the housing shortage, SB 9 & 10 are sure to throw a cat among the pigeons in the San Diego Real Estate market for years to come.

The coming months and years are likely to be rife with lawsuits around these new developments. There are community boards that are adamant that their neighborhoods are not going to be the frontier of housing growth. It’s going to start somewhere and wherever it is, the changes are likely to be seismic and far-reaching.

Checking In On The Status of Residential and Commercial Leases in California

May 4, 2021/in All Blog Posts, Corporate Litigation, Real Estate/by Chris Evans

Vaccines are being administered, indoor and outdoor activities are beginning to resume throughout California and it would appear that life is starting to get back to normal. Well, not quite. Before you get ahead of yourself, a litany of COVID-related protections remain in place, namely in the landlord-tenant arena. The below is a quick refresher on the state of landlord-tenant protections in California, all of which must be considered before you seek to return to business (and evictions) as usual.

SB 91 – COVID Eviction Protections Extended Through June 2021

Our last landlord-tenant summary focused primarily on California’s then recently passed Assembly Bill 3088, adopted at the end of August 2020 and formally known as the Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020 (“AB 3088”). In short, AB 3088 was designed to protect residential tenants—not commercial tenants—who faced, and continue to face, economic hardship due to COVID-19. With limited exceptions, the protections of AB 3088 apply to any tenant who is unable to pay all or part of their rent due to a COVID-19-related financial impact, so long as they provide an economic hardship declaration to the landlord within a specific period of time. A more detailed breakdown of AB 3088 can be found at our previous post here.

Currently, the protections of AB 3088 remain largely in place. Originally slated to protect residential tenants only through January 2021, the AB 3088 safeguards were extended by a second piece of legislation signed by Governor Newsom on January 29, 2021, known as Senate Bill (“SB 91”). The main thrust of SB 91 was to preserve the vast protections afforded by AB 3088 and extend its provisions another six months through June 2021. As a result of SB 91, no residential tenant can be evicted before June 30, 2021, if the basis of the eviction is rent that has been unpaid due to a COVID-19-related hardship and the tenant attests such fact under penalty of perjury. Additionally, if the tenant pays 25% of the rent owed from September 2020 through June 30, 2021, then the tenant cannot be evicted after the June 30, 2021 expiration. Landlords will be able to recoup the remaining rent balance owed after June 30, 2021, via a reconfigured small claims court. Alternatively, SB 91 also instituted a rental assistance program whereby residential landlords can apply to recover up to 80% of the unpaid rental balance through federal funds.

Also remaining in place and a key point to keep top of mind, among other things, is the expansion of the “just cause” eviction requirement. In essence, unless a tenant fails to attest to his or her COVID-related financial hardship, a residential tenant may only be evicted for either an “at-fault just cause” or “no-fault just cause.” In essence, unless a tenant fails to attest to his or her COVID-related financial hardship, a residential tenant may only be evicted for either an “at-fault just cause” or “no-fault just cause.” In other words, whereas “just cause” was previously only required if certain length of possession thresholds were met (see Civil Code section 1946.2), AB 3088 extended just cause to all tenancies and this protection has been extended via SB 91.

The foregoing is a relatively general and tremendously compressed explanation of SB 91 (and AB 3088), and a thorough review of the Bill’s intricacies is highly recommended. To assist in such review, our Firm has put together this simplified and updated version of our prior flowchart.

Again, What About Commercial Tenancies?

Like AB 3088 that came before it, SB 91 did not extend eviction protections to commercial tenants. As a result, commercial landlords and tenants should continue to look for guidance on whether a commercial eviction can proceed by turning their attention to the respective eviction moratoriums in place, if any, at the city and county levels.

The City of San Diego (the “City”), for instance, currently has its own eviction moratorium in place that sets forth the specific rules and regulations that would either permit or prohibit a commercial landlord from pursuing the eviction of a commercial tenant. The City of San Diego’s commercial eviction moratorium was re-adopted[1] on January 26, 2021 and will remain in place until June 30, 2021. Under the City’s commercial eviction moratorium, a commercial landlord cannot endeavor to evict (e.g. serving 3-day notices, filing unlawful detainer) a commercial tenant for nonpayment of rent if the tenant gives the landlord written notice of its inability to pay rent on or within seven days after the rent payment was due. The tenant’s notice must specify that the inability to pay is due to financial impacts related to COVID-19. The tenant will only be required to provide supporting documentation if the landlord asks for it within seven days of the tenant’s notice. If notice is sufficiently given by the tenant, the commercial tenant will have six months (or until December 30, 2021) to pay the unpaid rental balance due.

Our Firm has also put together a summary flowchart of the City of San Diego’s commercial eviction moratorium to help commercial landlords and tenants through avoid likely pitfalls.

Whereas the above only pertain specifically to the City of San Diego, if a commercial eviction moratorium is in place at your city or county levels, such moratoriums typically apply exclusively to the non-payment of rent scenario; but, landlords and tenants should carefully review each particular moratorium for the specific provisions, prerequisites and/or deadlines included in their respective moratorium, if any. As of the date of this posting, eviction moratoriums are currently in place in Southern California in, among other places, Carlsbad, Los Angeles County, and San Bernardino County. Notably, San Diego County does not have an overarching eviction moratorium in place; but, rather, such moratoriums, if any, are unique to the specific cities within the County.

Conclusion

As we near the end of the COVID-19 pandemic and begin to get back to business as usual, it is important to be cognizant of the fact that many COVID-related legislative actions and changes, particularly in the landlord-tenant space, will likely remain in place for months, if not years, to come. The landscape will continue to shift, and landlords and tenants should continue to look for the most recent updates with respect to how best to proceed, or not proceed, in the context of evictions.

The materials available at this web site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this web site or any of the e-mail links contained within the site do not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

[1] Oddly, the City of San Diego’s prior commercial eviction moratorium expired on September 30, 2020, and many commercial evictions were able to move forward given the gap in protection between October 1, 2021 through January 25, 2021.

Oh The Places You Will (Or Won’t) Go: An Update on Commercial and Residential Evictions in California Amidst COVID-19

December 8, 2020/in All Blog Posts, Corporate Litigation, Real Estate/by Chris Evans

Given the ongoing COVID-19 pandemic and the resulting changing legislative landscape, the state of commercial and residential evictions in California has been in what feels like a constant state of flux. Since March of this year, mandates and ordinances have been implemented at the state and local levels, rules have been adopted and withdrawn from the California judiciary, legislation was finally passed by the California legislature, and the Centers for Disease Control and Prevention (“CDC”) even chimed in in September. These changes have often led to more questions than answers.

Over the past several months, our Firm has put together multiple blog articles and webinars to summarize the ever-changing state of commercial and residential evictions in California, particularly in San Diego. As it stands now, however, the eviction guidelines that landlords and tenants should follow essentially boil down to two components: the recently passed California Assembly Bill 3088 and the CDC’s September 4, 2020 Order temporary halting evictions.

California’s Assembly Bill 3088

On August 31, 2020, after weeks of drafts, negotiation and compromises between lawmakers, tenant advocates and landlord organizations, Governor Newsom signed Assembly Bill 3088 into law, known officially as the Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020 (“AB 3088”). AB 3088 is a complicated and nuanced piece of legislation that is designed to protect residential tenants—not commercial tenants—who have faced, and continue to face, economic hardship due to COVID-19. As a result, with limited exceptions, the tenants within the scope of AB 3088 are those residential tenants who are facing eviction due to the non-payment of rent, and not those who are in material breach of other, non-monetary obligations of his or her lease.

A simplified breakdown of AB 3088 can be found in this flowchart.

What About Commercial Tenancies?

Notably, and something to keep in mind throughout the remainder of this post, is that neither California’s Assembly Bill 3088 nor the CDC’s Order apply to commercial tenancies—only residential tenancies. Instead, on September 23, 2020, Governor Newsom issued Executive Order N-80-20 , which allows local governments to continue to impose commercial eviction moratoriums and restrictions, if such localities so choose, for commercial tenants who are unable to pay their rent because of COVID-19. This delegation of power will remain in place until March 31, 2021, if not longer.

As a result, commercial landlords and tenants looking for guidance on whether a commercial eviction can proceed should turn their attention to the respective eviction moratoriums in place, if any, at the city and county levels. For instance, the City of San Diego had its own eviction moratorium in place—applicable to both residential and commercial tenants—that set forth the specific rules and regulations that would either permit or prohibit a commercial landlord from pursuing the eviction of a commercial tenant. The City of San Diego’s eviction moratorium expired on September 30, 2020, however, and many commercial evictions have been able to move forward, with payment of any deferred rent currently due by December 30, 2020, unless extended.

If a commercial eviction moratorium remains in place at the city or county levels, such moratoriums typically apply exclusively to the non-payment of rent scenario, but landlords and tenants should carefully review each particular moratorium for the specific provisions, prerequisites and/or deadlines included in their respective moratorium, if any. As of the date of this posting, eviction moratoriums are currently in place in Southern California in, among other places, Los Angeles County and San Bernardino County. Notably, San Diego County does not have an overarching eviction moratorium in place; but, rather, such moratoriums, if any, are unique to the specific cities within the County.

AB 3088’s Application To Residential Tenancies

When considering the options and rights of both residential landlords and tenants under AB 3088, there are two time periods to keep in mind: (1) March 1, 2020 through August 31, 2020; and (2) September 1, 2020 through January 31, 2021. Each period dictates if, and when, a landlord can pursue an eviction of a residential tenant that has failed to pay rent, as follows:

If a residential tenant failed to pay rent due during March 1, 2020 through August 31, 2020:

Landlord must serve tenant with 15-Day Notice that explains the tenant’s rights under AB 3088 and provides a blank Declaration for the tenant to claim a COVID-19 economic hardship (the “Hardship Declaration”);
If tenant fails to return the Hardship Declaration (and evidence of hardship if “high-income tenant”) within the 15-day notice period (excluding weekends and holidays), then the landlord can immediately proceed with eviction and file an unlawful detainer action (Note: be sure to include the new Supplemental Cover Sheet now required for all unlawful detainers—located here);
If tenant returns the Hardship Declaration (and evidence of hardship if “high-income tenant”) within the 15-day notice period (excluding weekends and holidays), then the Landlord can never evict the tenant for such non-payment of rent. The unpaid rent is not waived, but instead converted into consumer debt that the landlord can collect in small claims court beginning March 1, 2021;

If a residential tenant failed to pay rent due during September 1, 2020 through January 31, 2021:

Like the above, the Landlord must serve tenant with 15-Day Notice that explains the tenant’s rights under AB 3088 and provides a blank Declaration for the tenant to claim a COVID-19 economic hardship (the “Hardship Declaration”);
If tenant fails to return the Hardship Declaration (and evidence of hardship if “high-income tenant”) within the 15-day notice period (excluding weekends and holidays), then the landlord can immediately proceed with eviction and file an unlawful detainer action (Note: be sure to include the new Supplemental Cover Sheet now required for all unlawful detainers—located here); link: https://www.courts.ca.gov/documents/ud101.pdf]
If tenant returns the Hardship Declaration (and evidence of hardship if “high-income tenant”) within the 15-day notice period (excluding weekends and holidays), then the Landlord cannot evict the tenant so long as the tenant pays 25% of the rental amounts due by January 31, 2021. The balance of unpaid rent is not waived, but instead converted into consumer debt that the landlord can collect in small claims court beginning March 1, 2021;
If tenant returns the Hardship Declaration (and evidence of hardship if “high-income tenant”) within the 15-day notice period (excluding weekends and holidays), but fails to pay the required 25% of the rental amount due (see item c.), then the landlord can proceed with eviction and file an unlawful detainer action beginning February 1, 2021 (Note: be sure to include the new Supplemental Cover Sheet now required for all unlawful detainers—located here);

The foregoing is a relatively general and tremendously compressed explanation of AB 3088. A thorough review of the Bill’s intricacies is highly recommended. For instance, last year’s adoption of Assembly Bill 1482, which provided “just cause” protections to a limited number of residential tenants, has now been extended to all residential tenants until February 1, 2021, pursuant to AB 3088. A more detailed summary of AB 3088 can also be found in our previous blog post and webinar.

CDC’s Eviction Order

As if AB 3088 was not enough for landlords and tenants to get their heads around, the CDC issued its own eviction order just five days after AB 3088 on September 4, 2020 (the “CDC Order”). The CDC Order was issued to temporarily freeze evictions of residential tenants for the nonpayment of rent through December 31, 2020. In short, a tenant who wishes to rely upon the CDC Order must provide a declaration, under penalty of perjury, to the landlord certifying seven specific statements. A form declaration specifying the statements that can be used by tenants seeking the CDC Order’s protection can be obtained from the CDC’s website here.

The CDC Order has a shorter effective date than AB 3088 (prohibiting evictions until December 31, 2020 vs. potentially February 1, 2021), and presents significant concerns given the subjective and ambiguous nature of the CDC Order. For instance, one such statement that must be certified by the tenant is that he or she has used “best efforts” to obtain government assistance for rent or housing. This begs the obvious question—what are best efforts? The ambiguous nature of the language of the CDC Order invites potential disagreements between landlords and tenants about whether a tenant qualifies for the CDC Order’s protections, which may require the intervention of the Court to decide.

Notably, unlike AB 3088 and its mandated 15-day notice, there is nothing that requires the tenant to be made aware of the CDC Order or the tenant’s potential rights under the CDC Order. This fact, coupled with the existence and broad protections provided to residential tenants under AB 3088, make it unclear just how many residential tenants in California will actually rely upon the CDC Order (compared to states that do not have eviction protections in place). The CDC has provided a Frequently Asked Questions document that can further explain the scope and application provided by the CDC Order, which can be obtained here and is also highly recommended to review.

Conclusion

Commercial and residential landlords and tenants are facing an incredibly unique and unparalleled set of circumstances through the COVID-19 pandemic. The foregoing eviction protections implemented by California and the CDC have been enacted to try and combat not only the financial and economic stresses caused by the COVID-19 pandemic, but also the consequences of such stresses, such as being evicted from one’s home or office. That said, it is important to be cognizant of the fact that there are sure to be situations and instances that remain unaddressed, subject to dispute, or simply fall within the inevitable grey areas. Additionally, the interplay between local eviction moratoriums, AB 3088 and the CDC Order (or any other legislation that is ultimately passed) will unavoidably lead to conflicting language and further questions of uncertainty. The landscape will continue to shift, and landlords and tenants should continue to look for the most recent updates with respect to how best to proceed, or not proceed, in the context of evictions.

The materials available at this web site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this web site or any of the e-mail links contained within the site do not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

Flowchart: California COVID-19 Eviction Protections

December 8, 2020/in All Blog Posts, Real Estate/by Chris Evans

This flowchart gives tenants an idea of how eviction protection works under the Covid-19 Pandemic guidelines.

California Bill to Substantially Increase the Homestead Exemption Goes to Governor Newsom for Signing (AB 1885)

September 3, 2020/in All Blog Posts, Corporate Litigation, Real Estate/by Ajay Gupta

With all the craziness around eviction moratoriums, COVID-19, and election politics dominating the headlines, the California legislature quietly passed AB 1885 (its Senate Corollary was SB 832) on Tuesday, September 2nd. AB 1885 increases the California homestead to the greater of $300,000 or the countywide median sale price of a single-family home in the calendar year prior to the year in which the judgement debtor claims the exemption, not to exceed $600,000. As a frame of reference, the following are projections for a few of California’s major metropolitan areas:

San Diego County: $600,000 (estimated $628,500 Median)
Los Angeles County: $600,000 (estimated $664,500 Median)
San Francisco County: $600,000 (estimated $1,444,000 Median)
Riverside County: $400,500

The homestead exemption protects the value of a homeowner’s home in the event of a bankruptcy or a judgment creditor enforcing a judgment. The exemption provides that a specified portion of equity in a homestead, as defined, is exempt from the execution to satisfy such debts. However, the exemption does not protect against voluntary liens, such as a deed of trust or even a homeowner’s association lien. In addition, federal and state tax liens are generally not subject to any homestead protections. Depending on certain characteristics of the homestead’s residents, the law currently prescribes that the amount of the homestead exemption is either $75,000, $100,000 or $175,000—a stark difference from the potential $600,000 exemption now permitted under new AB 1885.

Proponents of AB 1885 argue that the current homestead standards are designed for an era when properties were simply worth less. The California homestead exemption protected almost the full value of a median priced home 45 years ago; but, today the homestead exemption covers barely 15%. Also, many other states with much lower home costs have far higher exemption amounts, with 8 states providing their homeowners with an unlimited exemption. Finally, proponents argue that COVID-19 mandates higher exemptions because a higher exemption will allow for individuals, who would otherwise lose their homes, to access bankruptcy relief during this economic disaster.

Creditors’ rights advocates argue that increasing the homestead exemption six-fold for most Californians is unwarranted and the product of political pandering during a once in a lifetime pandemic. While most opponents do not dispute that the homestead exemptions are outdated, they push for a graduated increase that is less severe and that takes age and disabilities into account.

Regardless of your opinion, this bill is sitting on Governor Newsom’s desk and is expected to be signed into law. If signed, the bill is likely to be effective on January 1, 2021; however, there may be procedural mechanisms for the Governor to make it effective immediately.

If you’d like to weigh in on this signature, now is the time. Send your emails to the governor at leg.unit@gov.ca.gov.

Discussion: California Legislature Set to Halt COVID Related Evictions on August 31st Through AB 3088

August 29, 2020/in All Blog Posts, Corporate Litigation, Real Estate/by Ajay Gupta

On August 13th, the California Judicial Council amended its emergency rules to lift the statewide ban on evictions. In doing so, the Courts effectively passed the baton to the California Legislature to develop and pass a bill to address the looming eviction crisis set to erupt on September 1, 2020 when the statewide eviction ban is formally withdrawn. After weeks of drafts, negotiation and compromises between lawmakers, tenant advocates and landlord organizations, Governor Newsom has announced Assembly Bill 3088, known officially as the Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020 (the “AB 3088”). The Relief Act will be voted on in the Senate on August 31, 2020 and will need a 2/3 majority vote to pass and be sent back to the Assembly.

AB 3088 is intended to serve as a statewide eviction moratorium bill, applicable only to residential landlords and tenants. Commercial tenants will have to continue to rely on local eviction moratoriums, many of which (including San Diego) are due to expire at the end of September 2020. In large part, AB 3088 will serve as a “stop-gap” measure to address California’s eviction crisis, until the California Legislature reconvenes early next year. While AB 3088 is incredibly nuanced and detailed, the general points of the Relief Act are as follows:

For rent due between the covered period of March 1, 2020 through August 31, 2020, residential tenants cannot be evicted if they declare under penalty of perjury that they have experienced a “COVID-19-related financial distress”;
Only high income tenants (those earning 130% of the County’s median income) would be required to show proof of COVID-19-related financial distress;
For rent due between the transition period of September 1, 2020 through January 31, 2021, tenants would still be required to pay 25% of the outstanding balance, and such payment would be due by January 31, 2021;
All unpaid rent would be converted to consumer debt and residential landlords would be permitted to collect such debt in Small Claims court, beginning March 1, 2021;
The Relief Act would preempt any local ordinance, resolution, regulation, or administrative actions such that eviction moratoriums previously passed by cities and counties will be grandfathered in, but they won’t be able to pass any extensions.

To learn more about AB 3088, its specific provisions, how it may be interpreted in Courts, as well as several other interesting and related real estate topics, please check out the discussion we held (coincidentally) just hours after the Relief Act was announced.

PANELISTS

Founder, Gupta Evans and Associates
Ajay Gupta, Esq

Attorney Ajay Gupta is a certified bankruptcy specialist and has been working on real estate and bankruptcy matters since 2005. He is a thought leader on real estate matters in California with an emphasis on secured transactions and foreclosures. Mr. Gupta founded Gupta Legal Center, now Gupta Evans and Associates, in 2008. He has represented debtors and creditors as well as landlords and tenants in over hundreds of litigation matters over the past 15 years both in state and federal court.

Senior Attorney, Partner, Gupta Evans and Associates
Chris Evans, Esq

Chris Evans is a skilled litigator and Partner at Gupta Evans and Associates, with a focus on the Firm’s real estate and business litigation matters. Over the course of his career, Chris has successfully litigated or reached favorable settlements for both individual and entity clients in an array of matters ranging from lease disputes in both the commercial and residential context, commercial and residential eviction proceedings, disputes between business owners (often styled as the “business divorce”), fraud and fiduciary claims and complex real estate investment fraud. Chris graduated magna cum laude and Phi Beta Kappa from San Diego State University in 2010 and immediately pursued his legal career by graduating from the University of San Diego School of Law in 2013. In law school, Chris served as an Editor for the San Diego Journal of Climate & Energy Law and a member of the Phi Delta Phi Honors Society.

Broker Associate, Team Steven Wener, eXp Realty of California, Inc.
Steven Wener

Steven Wener is a thought leader, author and entrepreneur who currently works as a coach, mentor, and licensed real estate broker. He started door knocking at the age of ten with his father, became a licensed real estate agent in 1993, consistently receives numerous top performer awards and has helped thousands of families transact real estate. Steven has also been a radio show host, as well as spoken on stages across the United States, sharing his message of judgement, justification, vulnerability, accountability, commitment and personal story. Steven focuses on the personal, versus simply transactional points of view and developed an engaging, disarming and professional approach to both business and personal relationships. Steven is married to his beautiful wife Rebekah and they have 3 incredible children together which are his pride and joy.

Senior Attorney, Gupta Evans and Associates
Jake Ayres, Esq

Jake Ayres is an experienced and versatile attorney and the senior associate at Gupta Evans and Associates, PC. Drawing on his depth of experience in litigation from two AmLaw 200 firms, Jake represents individuals and businesses in both real estate litigation and transactional matters, including disclosure and HOA disputes, foreclosures, asset purchases, and private placements. Jake also is also part of the vanguard of service providers to the legal cannabis and hemp industries, advising businesses therein regarding compliance with regulations and dispute resolution.

Senior Vice President and Director, Hughes Marino
Star Hughes-Gorup

Star Hughes-Gorup is a senior vice president and director at Hughes Marino, San Diego’s leading commercial real estate firm that exclusively represents tenants and buyers. Star is a licensed broker in eight states, handling complex transactions for her clients throughout the country. She is a five-time winner of The Irvine Company’s prestigious “Broker of the Year” award, a three-time winner of San Diego Magazine’s “Woman of the Year” award, a three-time winner of the Business Journal’s “Women Who Mean Business” award, a two-time winner of San Diego Metro Magazine’s “40 Under 40” award, among many other honors.

Residency Program Director, New York Presbyterian
Dr. Manish Garg MD

Dr. Manish Garg MD is a Professor of Emergency Medicine and the current Residency Program Director in the New York-Presbyterian health system. He holds a dual faculty appointment at Cornell & Columbia medical schools and works clinically in their hospitals. Dr. Garg was on the front-lines of the New York City epicenter of the COVID-19 pandemic caring directly for patients. As a researcher, Dr. Garg has secured grant funding that originated from the National Institutes of Health and the Centers for Disease Control & Prevention to investigate emerging infectious diseases. He has authored many scientific literature contributions including multiple COVID-19 manuscripts.

Upcoming Webinar: Exploring California’s Looming Eviction Crisis – Legislative Options for Renters and Landlords

August 26, 2020/in All Blog Posts, Real Estate, Webinars/by Ajay Gupta

This Friday, August 28th at 4PM, we’re hosting an all star panel to discuss California’s eviction crisis and we hope you’ll join us.

Free registration can be found here

On August 13th, the California Judicial Council amended its emergency rules to lift the statewide ban on evictions. Measures passed by Governor Newsom and local cities still remain in place to try and slow the pace of evictions; but, by and large, the now-lifted statewide eviction freeze was the only thing that was stopping the flood of evictions that everyone knows is coming.

California has a disproportionate number of residential renters, about 45% compared with 36% for the rest of the country. On the commercial front, it is clear that the restaurant and retail sectors have suffered hardest from the COVID crisis. Tenants in these sectors tend to have massive capital investments in location and are generally intimately tied to the location itself. These two sectors also employ about 1 out of every five people across the country and the employees tend to be residential renters.

In a very real sense, the first true signs of the fallout from COVID will happen through the eviction process. Up until now, the California Legislature has been content to punt on the issue of dealing with the eviction crisis because the Judicial Council ban effectively handled that issue for them. With that option gone, the California legislature is considering two bills AB 1436 and SB 1410 to address the medium run needs of landlords and tenants. It is likely that one of these two bills, or a compromise between the two, will be passed before the Judicial Council’s statewide eviction ban is lifted next Tuesday, September 1st.

Ultimately, there are only two options: On the one hand, California and the Federal government must continue to infuse money into the system to protect tenants and landlords from the inevitable fallout of COVID. Assuming the well goes dry or is otherwise channeled to other pastures, California is going to have to figure out how to spread this pain between tenants, landlords and, ultimately, the banks, in a manner that is not only economically feasible, but fair and equitable to all parties.

WEBINAR AGENDA

• Introductions

• Dr. Manish Garg, MD (10 minutes): From the front lines of the New York emergency room, what COVID was like and where it’s going over the next year. Dr. Garg will explain his opinions on vaccines, testing, tracking and treatment.

• Chris Evans, esq (10 minutes): Real Estate attorney and evictions expert provides a brief overview of SB 1436 and 1410. Mr. Evans will explore some of the salient details of what has been proposed, the changes, and the politics involved in these incredibly important bills.

• Round table discussion (30 Minutes): Our seasoned panel below will explore options for both residential and commercial landlords and tenants.

• Town Hall Style Meeting: We’ll invite participants into our discussion to ask questions, forward opinions, and generally participate in the discussion. This will likely be limited to 20 people, so email me once you’re registered so we can make appropriate accommodations.

PANELISTS

Attorney Ajay Gupta is a certified bankruptcy specialist and has been working on real estate and bankruptcy matters since 2005. He is a thought leader on real estate matters in California with an emphasis on secured transactions and foreclosures. Mr. Gupta founded Gupta Legal Center, now Gupta Evans and Associates, in 2008. He has represented debtors and creditors as well as landlords and tenants in over hundreds of litigation matters over the past 15 years both in state and federal court.

Chris Evans is a skilled litigator and Partner at Gupta Evans and Associates, with a focus on the Firm’s real estate and business litigation matters. Over the course of his career, Chris has successfully litigated or reached favorable settlements for both individual and entity clients in an array of matters ranging from lease disputes in both the commercial and residential context, commercial and residential eviction proceedings, disputes between business owners (often styled as the “business divorce”), fraud and fiduciary claims and complex real estate investment fraud. Chris graduated magna cum laude and Phi Beta Kappa from San Diego State University in 2010 and immediately pursued his legal career by graduating from the University of San Diego School of Law in 2013. In law school, Chris served as an Editor for the San Diego Journal of Climate & Energy Law and a member of the Phi Delta Phi Honors Society.

Steven Wener is a thought leader, author and entrepreneur who currently works as a coach, mentor, and licensed real estate broker. He started door knocking at the age of ten with his father, became a licensed real estate agent in 1993, consistently receives numerous top performer awards and has helped thousands of families transact real estate. Steven has also been a radio show host, as well as spoken on stages across the United States, sharing his message of judgement, justification, vulnerability, accountability, commitment and personal story. Steven focuses on the personal, versus simply transactional points of view and developed an engaging, disarming and professional approach to both business and personal relationships. Steven is married to his beautiful wife Rebekah and they have 3 incredible children together which are his pride and joy.

Jake Ayres is an experienced and versatile attorney and the senior associate at Gupta Evans and Associates, PC. Drawing on his depth of experience in litigation from two AmLaw 200 firms, Jake represents individuals and businesses in both real estate litigation and transactional matters, including disclosure and HOA disputes, foreclosures, asset purchases, and private placements. Jake also is also part of the vanguard of service providers to the legal cannabis and hemp industries, advising businesses therein regarding compliance with regulations and dispute resolution.

Star Hughes-Gorup is a senior vice president and director at Hughes Marino, San Diego’s leading commercial real estate firm that exclusively represents tenants and buyers. Star is a licensed broker in eight states, handling complex transactions for her clients throughout the country. She is a five-time winner of The Irvine Company’s prestigious “Broker of the Year” award, a three-time winner of San Diego Magazine’s “Woman of the Year” award, a three-time winner of the Business Journal’s “Women Who Mean Business” award, a two-time winner of San Diego Metro Magazine’s “40 Under 40” award, among many other honors.

Dr. Manish Garg MD is a Professor of Emergency Medicine and the current Residency Program Director in the New York-Presbyterian health system. He holds a dual faculty appointment at Cornell & Columbia medical schools and works clinically in their hospitals. Dr. Garg was on the front-lines of the New York City epicenter of the COVID-19 pandemic caring directly for patients. As a researcher, Dr. Garg has secured grant funding that originated from the National Institutes of Health and the Centers for Disease Control & Prevention to investigate emerging infectious diseases. He has authored many scientific literature contributions including multiple COVID-19 manuscripts.