Real Estate Law
Real Estate Transactions
The Law Office of Michele L. McGill assists buyers and sellers by reviewing their real estate contracts and transaction documents, or by preparing the documents for them when the seller and buyer have come to terms. Ms. McGill does not recommend for sale by owner when seller must find a buyer. A licensed real estate broker who is a member of the California Association of Realtors can help a seller prepare the property for sale, market the property, gain valuable exposure through the multiple listing service, inspect the property and disclose defects, protect a seller from liability arising from a real estate transaction, and many other services which pattorneys do not provide.
The Law Office of Michele L. McGill assists buyers, sellers, brokers, and agents in promptly handling problems that arise during a real estate transaction. Time is of the essence and prompt and knowledgeable guidance is critical to protect the client while ensuring the transaction moves forward as appropriate. The office can also assist buyers who do not wish to buy due to contract issues, financing problems, property defects, and other issues.
Real Estate Litigation
Fraud, Concealment, & Nondisclosure
Real estate transactions require sellers and listing brokers to make full disclosure of all known material facts concerning the property. An honest and thorough disclosure will seldom prevent a sale and will protect the seller and his agent from nondisclosure and fraud claims. Buyers who have been deceived, through misrepresentations or concealments, whether intentional or negligent, may assert a claim against the seller or broker who misled the buyer. One remedy is to seek damages for difference in the value of the property and other costs incurred as a result of the nondisclosure or fraud and, in cases of deliberate deception, punitive damages. An alternative remedy is to rescind or cancel the transaction due to mistake or fraud and return the parties to their former positions. Michele L. McGill has successfully prosecuted and defended these nondisclosure cases for more than 25 years.
The broker has a high standard of care and loyalty to his or her client. If the broker falls below this standard of care, he or she may the liable for damages for professional negligence. Deliberate malfeasance can lead to more severe consequences including exposure to punitive damages and discipline by the Department of Real Estate.
Neighbor disputes can includeboundary discrepancies, encroaching structures, easement claims, overgrown trees, noise problems, nuisance problems, water intrusion, and other serious issues. Our office advises property owners on their rights and responsibilities and will file suit or defend a suit where necessary to protect and preserve our clients’ property interests and peace of mind.
An easement is the right to use the property of another. They may arise out of necessity, with the consent of the adjoining property owner, or by prescription where the property has been used by another under certain circumstances. Easement disputes often arise when a conflict develops between adjoining property owners or when title is transferred to a new owner who was unaware of the easement claim. Our office advises property owners who assert easement claims or who wish to prevent or limit easement claims against their property.
Co-ownership disputes between tenants in common, joint tenants, and partners are common. Mediating a solution can be challenging because both economic and non-economic factors are involved. Recognizing and addressing these factors early on can guide the client to a resolution that allows all parties to continue their co-ownership. If the co-ownership is to continue, creating or amending a co-ownership agreement to prevent further conflict is essential. If the co-owners cannot resolve their differences, a sale can occur voluntarily based on a mediated agreement.
When co-owners are unable to either resolve their dispute or agree to sell their property, each co-owner has the right to sue for partition of the property, unless their co-ownership agreement restricts that right. The purpose of a partition action is to force a sale of the jointly owned property. If a party refuses to cooperate, the judge can order a forced sale and can appoint a receiver to take control of the property to carry out the judge’s orders.
Most co-owners, whether married couples, domestic partners, tenants in common, joint tenants, are uncertain what form of title they have or what the consequences are. This can lead to problems over time and complications the client never dreamed of. It is very important to find out what form of title you have and what it means. Our office is happy to assist any property owner in obtaining this vital information. If a problem has arises, we will assist co-owners in determining the best way to resolve it. Solutions may include reforming a grant deed to correct the form of title, or even removing an individual from title.
Forms of Title
There are five different ways to hold title to real property in California when there is more than one owner. Each form of title has different tax and other consequences for the property owners.
Tenancy In Common
This is the most common form of ownership. If you don’t specify a different form, your title is as a tenant in common. Tenants in common can own unequal shares of the property. Title does not pass to the co-owners on your death. That means you can direct in your will or trust who will receive your property on your death.
Disputes among co-owners are happening more often because of the current financial crisis. For example, if one co-owner wants to sell and the other doesn’t, or if one co-owner has lost his job and cannot pay his share of the property expenses.
Unless you have a written agreement that says otherwise, each co-owner has a right to demand a sale of the entire property – and can enforce that right by a lawsuit for partition. The court will order the sale of the property and may appoint a referee to take control of the property pending a sale.
If you don’t have a written co-ownership agreement with your co-owners, you should get one – before a dispute arises – to avoid becoming embroiled in very costly court proceedings.
A joint tenancy ownership must be specified in the Grant Deed. A joint tenancy includes the right of survivorship so that on your death, your interest in the property passes to the surviving owners – no matter what your will says. All joint tenants are presumed to have equal ownership interests. [So if you put another person on title to your property with the intent that they will receive your interest if you die – be aware that they can claim a 50% interest now.] Any joint tenant can sever the joint tenancy without notice to the other joint tenants at any time. (Title then becomes tenancy in common.)
When a joint tenant dies, the surviving joint tenants receive the deceased joint tenant’s interest with a stepped up basis – as if they just paid full market value for that interest – which may save them from having to pay capital gains taxes on the sale of that interest. But only the basis for the deceased joint tenant’s share is stepped up. So if there are two joint tenants and one dies – the survivor gets a stepped up basis on HALF.
Married couples can hold title as community property. They have the option to hold title “with rights of survivorship” or not.
If a married person holds title as community property, the surviving spouse gets a 100% stepped up basis for tax purposes. That means the surviving spouse can sell the property and incur no capital gains tax liability.
If a married person holds title as community property with rights of survivorship, then title to the property will pass to the surviving spouse when the first spouse dies – without any probate or trust proceedings.
Community property without rights of survivorship. If the deed does not include the right of survivorship – then the property may still pass to the surviving spouse through a probate proceeding or trust. A surviving spouse can file a Spousal Property Petition to obtain title to community property – but this takes 4 -6 weeks and costs a few thousand dollars in legal and court fees.
Co-owners engaged in business can hold title to their property in the partnership name. The partnership holds title and the individuals own an interest in the partnership. Partnership interests are transferred by assignment.
It is critical to have a written partnership agreement because the partners need an EXIT STRATEGY to determine what happens if a partner dies, retires, of leaves the partnership.
Co-owners who want to direct the disposition of the property on their death, can create a revocable trust and transfer their interest in the property to themselves as trustee. When the co-owner/trustee dies, the successor trustee is able to sell the property and distribute the proceeds – or distribute the property itself – to the beneficiaries of the trust without the delay and expense of probate proceedings.
You then hold title as trustee and, when you die, your successor trustee is able to sell the property and distribute the proceeds – or distribute the property itself – to the beneficiaries of your trust.
The trust title is a layer over the underlying form of title. So you can hold community property in trust or tenancy in common property in trust.
Property owners transfer title for many different reasons. Such title transfers have legal and tax consequences. The Law Office of Michele McGill assists individuals with title transfers and explains the forms of title available and the consequences of each. It is much too important to do it wrong. The Law Office of Michele L. McGill has been assisting property owners with title issues since 1982 and would be happy to assist you.