A new California law, SB 1150, requires mortgage lenders to communicate with surviving spouses and other heirs if the borrower passes away. California’s Homeowner’s Bill of Rights, enacted in 2013, expanded the rights of homeowners during the foreclosure process, but failed to provide relief for surviving family members if the decease’s mortgage lender initiates foreclosure proceedings. SB 1150 closes this loophole in California's Homeowner's Bill of Rights and cuts through red tape for grieving family members.
The Homeowner's Bill of Rights
During the housing crisis, there were approximately 4 million foreclosures nationwide. A foreclosure is the process where mortgage lenders claim possession of property after the borrower ceases to make payments. California’s Homeowner's Bill of Rights was enacted in response to this crisis, creating additional fairness and transparency during the foreclosure process.
The Homeowner's Bill of Rights provides several protections for homeowners during foreclosure proceedings. One of the most important protections is the guarantee of a single point of contact during the foreclosure process. One person or a team of people are assigned to the homeowner’s case. The person or team handles the paperwork and works to obtain loan modification decisions. The Homeowner’s Bill of Rights also restricts dual track foreclosures. In other words, while the homeowner is trying to secure a loan modification the foreclosure process is put on hold and the mortgage lender cannot take further action to foreclose.
The Homeowner’s Bill of Rights also helps redress mortgage fraud crimes. The law expanded the attorney general’s power to prosecute and investigate crimes related to mortgage fraud. Moreover, the law extends the statute of limitations from one to three years, giving prosecutors more time to address these complex crimes.
While the Homeowner Bill of Rights provided much relief to loved ones, it did not extend these rights to surviving family members, and thus, the California legislature enacted SB 1150
SB 1150 aims to provide further protection for surviving family members facing foreclosure and closes a loophole in the Homeowner Bill of Rights. Normally, new widowed spouses and/or other heirs take on home ownership responsibilities when the mortgage holder passes away. This new law primarily helps seniors, particularly women, as women tend to outlive men by 7 years. Before the law was enacted, surviving family members, not listed on the mortgage, would have difficulties contacting mortgage lenders. There were many instances where mortgage lenders would refuse to speak with the family member without a Power of Attorney from the deceased relative or would request to speak to the deceased directly.
With the enactment of SB 1150, mortgage servicers are required to communicate basic information about the mortgage to surviving family members and also explain options for mortgage term modification. Surviving family members can also enjoy other protections laid out in the Homeowner’s Bill of Rights, such as the single point of contact guarantee. The family members are also able to assume the mortgage and modify it. Without this new law, it would often take several years for a surviving family member complete the loan modification process, during which the mortgage lender was advancing the foreclosure process. This red tape led to many preventable foreclosures for grieving family members.
Is SB 1150 a Good Idea?
There is no doubt that SB 1150 significantly helps surviving family members, but many opponents of the new law argue that it will have a negative impact on the economy. These critics contend that SB 1150 creates more risk for lenders, since it allows parties that are not on the original mortgage loan to interfere with foreclosures. This increased risk could affect the availability of credit and increase the cost of mortgage loans. Moreover, many lenders might leave the mortgage lending market, leading to job losses.
Despite these criticisms, the potential problems created by SB 1150 are overshadowed by the benefits. Homeownership is one of the primary methods families build wealth in the United States. The law reduces only unnecessary foreclosures by allowing grieving families that are able to assume the mortgage a chance the prevent foreclosure.
Authored by Robin Sheehan, LegalMatch Legal Writer
It’s not quite Halloween but zombie properties have been haunting the housing market for some time now. These are properties that have been left vacant as a result of the 2007-08 housing market collapse. These so called “zombie” properties went through foreclosures and have been left vacant. Banks have been trying to bid these houses off to buyers but the rate of purchase has been rather stagnant. These kinds of homes are located everywhere, from the Manhattan residential areas to Silicon Valley where real estate has become a new venture. Of course, the key economic principle of supply and demand plays a huge role here. The problem is that these homes are in terrible condition and cost of repair is so burdensome that it has kept interested buyers and investors away.
One legal issue that could potentially come up with these vacant properties is a rather old property concept known as adverse possession. Adverse possession is a method of acquiring title to real property by way of possession. More colloquially, it is known as squatter’s rights. The best way to explain this concept is by way of an example. Let’s say a person trespasses onto a piece of property and remains there for an indefinite period of time--the person uses the property as it were their own and no others claim a right to the property during that duration. Over the course of time, this land can legally become the property of that squatter.
The essential elements of adverse possession are: 1) person must have actual possession over the property 2) person must use the property adverse to what the true owners of the property want 3) use of the property has to be made in a way that the legal owner is aware of this and 4) continuous use of the property. Adverse possession is a form of trespass. The trespasser becomes rightful owner of the property if certain conditions are met.
Now, with regards to the zombie property, there have been numerous cases in the past few years where certain individuals have decided to take up residence on such property. Typically, such property belongs to the bank and so this becomes recognized as trespass. However, if the bank does not take measures to remove the squatter, then the squatter might be able to claim legal ownership of the property. Of course, as laid out above, the bank must have notice of such possession before the clock starts running. There is much case law addressing adverse possession and whether or not the squatter can legally be entitled to the property.
For the most part, courts have sided with the legal owner and will deem the action a trespass with civil action readily available to be made against the squatter. For many of these cases, the bank or other legal owner is completely unaware that the squatting is taking place. Big commercial banks like Wells Fargo have an extensive list of real property that is under their possession and it is only natural for some property to go unnoticed. There has to be notice of the squatter’s behavior and it is only when the legal owner disregards the squatter’s actions that the clock starts ticking. Adverse possession is a state law issue and the specifics vary from state to state. Ultimately, the benefit of the doubt will be given to the legal owner as it is their rightful property and only under extreme circumstances will the squatter be legally entitled to the property.
Other Methods of Obtaining Property
Another method of attempting to control a piece of property is another rather old doctrine—easements. Easements are somewhat different than adverse possession. Adverse possession is about possession, so there is actual legal possession over the property; with easements it is more about use rather than possession. There are many different kinds of easements, but essentially easements allows one to make use of property that does not legally belong to them and to indefinitely make use of the property if certain conditions are met. These terms are very similar to the ones outlined for adverse possession.
Prescriptive easements practically function the same way as an adverse possession action. Remember that easements are about use, not possession and hence possession is not always required before use is allowed. The bottom line is that there are various means for individuals to come into possession and control of certain pieces of property without having to take out a mortgage or dealing directly with the big banks or other lenders.
Authored by Sam Behbehani, LegalMatch Legal Writer
Since 2008, Airbnb has offered affordable accommodations, owned privately by individuals, in cities across the world. The company created a platform for homeowners to rent out rooms or entire homes for people to stay in temporarily, allowing the owners to operate like a hotel. The renters book the visit through the website, and the acceptance or rejection of the visit is up to the homeowner.
In May 2016, a discrimination claim was filed against Airbnb after a renter was denied accommodation by a host due to the renter’s race. Soon, other Airbnb renters began to share their stories of discrimination from hosts. It wasn't long until Airbnb faced backlash from the community.
To end user discrimination, in September 2016 Airbnb created a new policy that renters and hosts must follow or face suspension/termination from Airbnb. The policy is an inclusive and broad policy that considers U.S. law and the variations within each jurisdiction. The policy is patterned after anti-discrimination laws.
So what do hosts need to know about their new policy? What do renters need to know?
What Do Hosts Need to Know?
Under Airbnb's new policy, hosts cannot decline accommodation on the basis of race/color, ethnicity, national origin, religion, sexual orientation, gender identity, and marital status. There are a few exceptions to the policy, such as:
While hosts are free to turn down guests for any valid reason, Airbnb encourages hosts to do all they can to welcome all renters. If any host shows a pattern of rejecting renters from a “protected class,” then Airbnb may suspend the host’s account. If any host violates Airbnb’s anti-discrimination policy, then Airbnb can suspend the host’s account and use any required “steps to enforce this policy.”
What Do Renters Need to Know?
If a renter faces discrimination from a host, then they should report the discrimination to Airbnb. But as noted above, a renter will not be protected by anti-discrimination laws if the renter:
But sometimes, the difference between protected and non-protected is a fine line. For example, maintaining a kosher kitchen is a Jewish tradition. But if a renter was denied accommodation for not being able to maintain a kosher kitchen, it does not mean that the renter was denied because they are not Jewish.
Yet denying accommodation solely because the renter is or is not Jewish, would be a violation of Airbnb’s anti-discrimination policy. But how can Airbnb determine if the renter was discriminated or if they were lawfully denied accommodation?
The Policy is Broad and General to be Inclusive, But That Makes it Harder to Implement
Airbnb uses the words “inclusion and respect” to describe the ultimate goal of their policy. But to achieve full inclusion and respect, Airbnb must examine and decide the outcome on every filed complaint.
They will need to ensure that each unique case results in a consistent outcome, to reach their goal of “inclusion and respect.” Since the complaints will vary in circumstances and facts, each complaint would be addressed on a case-by-case basis. It is not clear how Airbnb plans on handling complaints, but the nature of the policy shows how difficult it will be to enforce.
In the end, only time will tell if Airbnb’s new policy will curb or end renter discrimination.
Authored by Janice Lim, LegalMatch Legal Writer
Things may begin to quiet down now in North Dakota with regard to the protests against the Dakota Access Pipeline (DAPL). On Tuesday, a judge granted a temporary order requiring the company building the pipeline to halt construction on the portion of the pipeline that traverses underneath the Missouri River.
The Standing Rock Sioux Tribe brought a lawsuit against the Army Corps of Engineers, the federal entity who granted the permits for the multi-state pipeline, for allegedly not sufficiently consulting with the tribe before granting the permits to Dakota Access. As a result of the lack of proper consultation, the pipeline threatens to violate sacred sites that are located outside of the tribe’s reservation on private land belonging to others. It may also pose a health hazard by crossing the river, as the Missouri River is the main water source for everyone living on the reservation.
While the tribe is seeking to ultimately gain a permanent injunction against the pipeline as a whole, the judge is currently only focusing on the portion of the pipeline affecting the river and the tribe’s riparian rights. Anyone who possesses land that contains access to a navigable body of water, such as a large lake or a river, has the right to use water from that body of water. Other people cannot significantly interfere with a landowner’s preexisting use of water, especially if that use of water is for domestic purposes. This means that another person cannot negatively impact the quantity and, perhaps more importantly, the quality of water to which a landowner is accustomed.
The Standing Rock Sioux Tribe has been using the Missouri River, which runs along the border of its reservation, as a source of water since the tribe was relocated to a reservation there in the 1860s. Eventually, the river became the tribe’s only source of water for both commercial and domestic purposes. As a result, the Standing Rock Sioux Tribe has a right to access the water in the river at the same quantity and quality in the future as it does now.
The construction for the pipeline and even the pipeline itself may interfere with the quantity and the quality of the water due to its location upstream from the reservation. If the construction can be done in a manner that will not significantly impact the tribe’s access to water from the Missouri River, then the construction will not interfere with the tribe’s riparian rights to the river.
A Looming Threat
However, DAPL’s existence under the riverbed itself may also pose an unacceptable threat to the tribe’s riparian rights. As previously mentioned, a landowner with riparian rights has the right to water that is of the same quality in the future as it is now without that quality being significantly changed by another person. If the placement of the pipeline creates a threat to the quality of the water present in the river, then the pipeline is impermissible. Oil pipelines have been known to burst and cause irreparable damage to the environment, such as the Exxon Mobil pipeline burst that happened near Mayflower, Arkansas in 2013. For weeks following the Mayflower oil spill, the residents of Mayflower showed signs of exposure to harmful chemicals that were a result of the pipeline burst.
If the proposed DAPL were to burst and cause an oil spill in the Missouri River, then it would significantly harm the quality of the water that the Standing Rock Sioux Tribe depends upon for domestic purposes. If the court finds that the Army Corps of Engineers failed to properly consult with the tribe over its use of and dependency on the water of the Missouri River in light of the potential risk, then the court may side with the tribe and issue a permanent injunction against the construction against the pipeline.
The court may also halt the construction of the Dakota Access pipeline if it determines that the Army Corps of Engineers did not properly evaluate the risk posed by the pipeline before issuing the permits that the company needs in order to lay the pipeline under the riverbed. Alternatively, the court may find that the Army Corps of Engineers did all that was required of it to ensure that the pipeline did not pose an unacceptable risk to the tribe’s riparian rights and that there is nothing wrong with the issuance of the permits.
Any major construction project and the resulting product can impact the rights of nearby landowners to access of clean air and clean water. Thus, it is important for governments to ensure that these rights are not severely impacted through only issuing permits when they have made sure that riparian and air rights are not going to be seriously impacted. If you are concerned that your access to clean air or clean water is being put at risk by a new construction project, contact a real estate lawyer right now.
Authored by Kristen Johnson, LegalMatch Legal Writer
What do Joe Montana and Hunter Pence have in common? Other than having professional careers in athletics for San Francisco teams (former hall of fame quarterback for San Francisco 49ers and current all-star outfielder for San Francisco Giants), they both have been residents of the luxury condominium complex in San Francisco known as Millennium Towers.
Millennium Tower is a 60-story luxury building located on Mission Street in San Francisco’s financial district/South of Market (SoMa). It currently holds a spot as one of the top 10 residential buildings in the world according to Worth magazine. Condos sell for anywhere from $1.6 million to north of $10 million.
But now residents are thinking they “sunk” money into a bad investment, because the building is sinking. And not just a little – it’s sunk 16 inches and tilted 2 inches since its opening in 2008. The reason? It’s built on landfill that is prone to liquefying.
While the fact that it’s sinking is certainly cause for concern, Stanford’s seismic center says that there is no actual risk that it will fall over, at least at this time. “The settlement has not significantly affected the seismic performance of the building, and does not represent a safety risk.”
What, if any, legal recourse do the residents of Millennium Tower have?
Depreciation of Home Values
One of the main concerns of the residents at Millennium Tower, as it should be, is whether the value of their luxury condos have depreciated in value. It’s a valid concern. With all the bad press that Millennium Tower is receiving, it is unlikely people are jumping at the opportunity to live in the sinking building, even if experts claim the sinking will not cause the building to topple over. The only hope residents have of selling their luxury condos at this point is at deeply discounted prices to speculators. The condos are not exactly carrying the equity homeowners once believed would make home ownership in Millennium Towers a wise investment.
While a claim that property damage to the building is effectively depreciating the value of their homes, sinking home values in and of itself is not a valid legal claim. It is an unfortunate effect of faulty construction.
Millennium Tower’s Homeowners Association (HOA) states that they expected the building to settle a maximum of 12 inches over the life of the building. It’s alarming that the building settled four more inches than expected in just eight years.
Geologists are saying that the building is settling because it was built on landfill that has liquefied. In other words, the building was built on dense sand, not bedrock. Additionally, construction for the new Transbay Transit Center next door to the tower is being blamed for movement, but they deny liability.
Construction defect is a legal cause of action that alleges some type of faulty or defective work that occurred during construction that leads to damages. On a project like the Millennium Tower, anybody who had anything to do with the building will be sued. This includes the developer, architect, and construction company that built the tower. All of the parties associated with the project could be personally liable for the damage and any subsequent damage to individual owners. If the construction company, architect, and developer have insurance, the insurance can also be on the hook for damages.
On behalf of all the over 400 homeowners of Millennium Tower, a class action was filed recently against Millennium Partners and the Transbay Joint Powers Authority. Both have denied all liability. The lawsuit cites uneven floors and interior cracks, among other problems caused by improper design and construction defects, causing the building to sink into the landfill beneath it and lean to the northwest. The result of these catastrophic defects is diminution of value to all the units in the building. The lawsuit seeks at least $500 million in damages for the class, which amounts to an average of $1.25 Million for each homeowner.
This is the first step in a legal battle that could last years and will cost millions to resolve. Nevertheless, these cases typically settle. Moreover, the cost of ongoing litigation, which can reach into the hundreds of thousands or even millions in this case, deter many plaintiffs from continuing to litigate. Homeowners of Millennium Tower have relatively deep pockets themselves, so they likely won’t be deterred by mounting legal expenses required to continue to litigate this lawsuit.
Authored by Erin Chan-Adams, Legal Match Legal Writer and Attorney at Law