Do previous home owners have the right to 50% of a settlement claim against the building company of my home?: I purchased a home the beginning of the year. I recently received a call from a firm telling me my house was currently in a pending litigation against the building company. This information was not disclosed to me during the purchasing of my home. The person on the phone told me that I had to sign paperwork in order for the previous owner to give me rights to half of the settlement because I had the right to the other half because the claim was under his name. They told me if I declined I would not receive any money from the settlement. They also told me that if something to my home with the bad construction that I would not able to sue the building company even if I did not get part of the settlement. I want to know if this information is correct and if there is something else there can be done. I don't understand why the previous owner has right to the claim when he does not own the home, he didn't disclose this information when selling the home, and I bought the home at market value. I need legal advice.
Trevor’s answer: I am a real estate litigation attorney that has represented parties in multiple construction defect cases (usually defense). There are three main cases that have been decided by the California Appellete and Supreme Courts over the past several years that have described circumstances where the right to pursue a defective construction cause of action vests in the original owner as opposed to the current owner. None of these cases provide for a 50/50 split interest (shared standing) in the cause of action. Sounds to me like facts of the subject case may prove that you own 100% of the rights to any and all damages recoverable and the previous owner and their attorney are simply trying to get you to sign a stipulation granting them joint interests therein. Talk to a competent attorney. Good luck!
Help on my commercial property transaction?:
I'm purchasing -through a corporation/LLC which I will soon form - a commercial property with a tenant and lease contract in place (I'm at due diligence now) and need to verify the tenant.
I received copy of the lease, I want to modify a couple of items and strengthen a couple of provisions. Can I do this as an amendment, and if so, should I do so before or after closing?
And, can I require the owner the rent roll stating rental payments and any other outstanding debts are fully paid?
Trevor’s answer:
Dear Asker,
My response here is not intended to criticize you or to pursuade you not to follow through with the transaction; if the numbers add up, the pro forma analysis anticiptes built-in value, and the liabilities are limited, then a good investment should not be disregarded.
It is clear from your questions that you are not an experienced commercial real estate investor; perhaps this is your first CRE investment. These questions pertain to trivial concepts most serial CRE investors are familiar with. Generally, no, a lease cannot be modified midterm without both parties mutually agreeing to the new terms; the particular terms of the existing lease may provide otherwise in rare occasions. Although you can negotiate for new terms with the prospective tenant prior to closing, you legally cannot modify the existing contract before completing the transaction and having been assigned the rights to the lease agreement.
With all that said, even the experienced CRE investor consults with competent legal counsel regarding the purchase of any new investment. Simply put, there is a much higher potential that significant liabilies will accompany the transfer of title to commercial real property. Accordingly, I highly recommend you hire a knowledgeable real estate attorney licensed in your state to represent your interested in this purchase.
Good luck with your investment!
- Trevor W. Martin, CA Attorney and Broker
Can a tenant who is on active military duty be evicted for nonpayment of rent?: The tenant has not paid August rent but returns home on August 29 and promised to pay at that time
Trevor’s answer: Yes, it is a private contract between two citizens. If one breaches the contract, the other may seek out all remedies available to him or her, including eviction in the case of an unlawful detainer.