(a) Real Estate Transactions
Real estate law is divided into two major sub-categories which include real estate transactions and real estate litigation.
Real estate transactions are governed by a wide body of federal, state and common laws. The requirements established by state law often differ significantly from one state to the next.
Real estate brokers are employed as the agent of the seller in order to obtain a buyer for their property. The contract between the broker and seller is called a listing agreement. The listing agreement may be an open agreement whereby the broker earns a commission only if he or she finds a buyer. A listing is exclusive if the broker is the only agent entitled to a commission for finding a buyer. Under an exclusive arrangement a broker may be entitled to a payment even if the seller finds the buyer without the broker’s aid. Real estate brokers and salesperson are licensed and regulated by local state laws. See, e.g., California Civil Code § 2079. Federal and state agencies or organizations may also provide further guidelines related to this topic.
The Federal Fair Housing Act prohibits discrimination in real estate transactions on account of race, color, religion, sex or national origin. See 42 U.S.C. §§ 3601-3631. Real estate brokers are specifically prohibited from discriminating by the aforesaid Act. See § 3606 of the Federal Fair Housing Act. You can also visit the United States Department of Housing and Urban Development (“HUD”) for further information.
The agreement to sell between a buyer and seller of real estate is governed by the general principles of contract law. See Contracts. In addition, the Statute of Frauds requires that contracts for real property be in writing. See California Civil Code § 1624.
It is commonly required in real estate contracts that the title to the property sold be marketable. This requires that the seller have proof of title to all the property he or she is selling and that third parties not have undisclosed interests in the title. Property signifies dominion or right of use, control, and disposition which one may lawfully exercise over things, objects, or land. One of the basic dividing lines between properties is between real property and personal property. Generally, the term real property refers to land. Land, in its general usage, includes not only the face of the earth, but everything of a permanent nature over or under it. This includes structures and minerals.
There are further divisions within the real property classification. The most important are freehold estates, non-freehold estates, and concurrent estates. (Others are future interests, specialty estates, and incorporeal interests).
- Freehold estates are those in which an individual has ownership for an indefinite period of time. An example of a freehold estate is the "fee simple absolute", which is inheritable and lasts as long as the individual and his heirs want to keep it. Another example is the "life estate", in which the individual retains possession of the land for the duration of his or her life.
- Non-freehold estates are property interests of limited duration. They include tenancy for years, tenancy at will, and tenancy at sufferance.
- Concurrent estates exist when property is owned or possessed by two or more individuals simultaneously.
For the most part, states have exclusive jurisdiction over the land within their borders, and their law concerning the kind of interests that can be held and how they are created is not subject to federal law.
A title insurance company or an attorney is often employed by the buyer to investigate whether the title is, indeed, marketable. Title insurance companies also insure the buyer against losses caused by the title being invalid.
In order to pass title, a deed with a proper description of the land must be executed and delivered. Some states require that the deed be officially recorded to establish ownership of the property and/or provide notice of its transfer to subsequent purchasers. The most common method of financing real estate transactions is through a mortgage.
A mortgage involves the transfer of an interest in land as security for a loan or other obligation. It is the most common method of financing real estate transactions. The mortgagor is the party transferring the interest in land. The mortgagee, usually a financial institution, is the provider of the loan or other interest given in exchange for the security interest. Normally, a mortgage is paid in installments that include both interest and a payment on the principle amount that was borrowed. Failure to make payments results in the foreclosure of the mortgage. Foreclosure allows the mortgagee to declare that the entire mortgage debt is due and must be paid immediately. This is accomplished through an acceleration clause in the mortgage. Failure to pay the mortgage debt once foreclosure of the land occurs leads to seizure of the security interest and its sale to pay for any remaining mortgage debt. The foreclosure process depends on state law and the terms of the mortgage. The most common processes are court proceedings (judicial foreclosure) or grants of power to the mortgagee to sell the property (power of sale foreclosure). Many states regulate acceleration clauses and allow late payments to avoid foreclosure. Some states use instruments called deeds of trust instead of traditional mortgages.
Three theories exist regarding who has legal title to a mortgaged property. Under the title theory title to the security interest rests with the mortgagee. Most states, however, follow the lien theory under which the legal title remains with the mortgagor unless there is foreclosure. Finally, the intermediate theory applies the lien theory until there is a default on the mortgage whereupon the title theory applies.
The mortgagor and the mortgagee generally have the right to transfer their interest in the mortgage. Some states hold that even when the purchaser of a property subject to a mortgage does not explicitly take over the mortgage the transfer is assumed. Mortgages employ due-on-sale and due-on-encumbrance clauses to prevent the transfer of mortgages. These clauses allow acceleration (having the principal and interest become due immediately) of the mortgage. In 1982, Congress made these clauses enforceable nationwide by passage of the Garn-St Germain Depository Institutions Act of 1982. The law of contracts and property govern the transfer of the mortgage's interest.
If the mortgage being foreclosed is not the only lien on the property then state law determines the priority of the property interests. For example, Article 9 of the Uniform Commercial Code governs conflicts between mortgages on real property and liens on fixtures which are personal property attached to a piece of real estate. When a mortgage is a negotiable instrument it is governed by Article 3 of the Uniform Commercial Code. See Negotiable Instruments. A mortgage may be used as a security interest by the mortgage. See Secured Transactions.
The law of mortgages is mainly governed by state statutory and common law. Mortgages are regulated by federal or state law or agencies depending on under whose law they were chartered or established. The Office of Thrift Supervision is an office in the Department of the Treasury, which regulates federally chartered savings associations. The Comptroller of the Currency charters and regulates national banks. Federal credit unions are chartered and regulated by the National Credit Union Administration.
Federal agencies that purchase loans and mortgages are the Federal National Mortgage Association or Fannie Mae, the Federal Home Loan Mortgage Corporation or Freddie Mac, and the Government National Mortgage Association or Ginnie Mae. The federal government also insures mortgages through the Federal Housing Administration (“FHA”).
(b) Real Estate Litigation
Real estate litigation and related remedies is a main component of our law firm’s practice. We are knowledgeable about dispute resolution at all levels, whether the manner of resolution is mediation, arbitration or general litigation. We work closely with transactional real estate lawyers in seeking to avoid litigation. When necessary, we litigate for clients in all aspects of the industry whether it be borrowers, lenders, developers, landlords, brokers and in all phases of the real estate business cycle. The Law Offices of Salar Atrizadeh handle the most complicated real estate litigation matters. We are familiar with disputes concerning the foreclosures of mortgages, financing of projects, construction litigation, disputes between commercial landlords and tenants, buyers and sellers of real estate and participants within the ownership group. We are familiar with the issues involved in seeking provisional remedies, and frequently represent clients in foreclosures, mortgage fraud, receiverships, and unlawful detainers.
Real estate disputes whether involving purchase and sale contracts, partnership disputes, claims involving breach of fiduciary duty, commercial leases, property insurance, property tax assessments, design and construction defects or boundaries require litigation expertise to resolve. The Law Offices of Salar Atrizadeh consist of skilled, experienced litigators who collaborate with top attorneys in related fields to achieve the most favorable outcomes for their clients.
- Our fiduciary duty, partnership and contract disputes representation has resulted in judgments and defense verdicts in favor of our clients
- We represent buyers and potential buyers of real estate in disputes
- We represent property owners in disputes over boundary lines and easement rights, enforcement of seismic retrofitting requirements and a neighboring property owner's failure to comply with zoning and permit requirements
- We represent owners of residences with major design and construction deficiencies, pursuing claims against their contractors and others
Our attorneys have experience in adversarial proceedings includes trials before judges and juries as well as alternative dispute resolution forums such as nonbinding mediation and binding arbitration. While we favor resolving disputes outside the courtroom, we are fully prepared to try any case in state or federal trial and appellate courts. In all cases, our goal is to provide the best, most cost-effective service for our clients who include property owners, sellers, buyers, developers and investors, as well as lenders, borrowers, landlords, and tenants.
We handle real estate disputes of all kind, including, but not limited to, the following topics:
- Litigation concerning foreclosures and violations of federal laws such as TILA, RESPA and/or HOEPA
- Complex commercial and retail landlord/tenant disputes
- Commercial and retail evictions
- Quiet title actions
- Adverse possession actions
- Boundary disputes
- Litigation concerning easements
- Condemnations for private rights-of-way
- Eminent domain actions
- Development and entitlement disputes
- Trespass and nuisance claims
- Specific performance actions
- Escrow and earnest money disputes
- Mechanics' lien foreclosures and petitions to bond around mechanics' liens
- Realtor commission disputes
- Disclosure disputes (known and unknown conditions)