Mediation of Commercial Real Estate Disputes

Mediation has been proven effective

Mediation has been proven effective in commercial real estate disputes for a variety of reasons. Mediation may be conducted in a timely fashion, often within a few months of the dispute arising. For mediation, it is possible for just a few hours involved in one meeting will achieve mutual agreement or decide that the dispute must escalate. Also, when the agreement to mediate is part of a real estate contract, then the parties are bound to do so before they can escalate the dispute to litigation.

The Trained Mediator

Mediation evolves the parties to the dispute and a trained mediator. This mediator is someone completely unassociated with the dispute and has no vested interest in the outcome. They assist the parties in first identifying the sources of their conflict and then help them focus on the issues of real importance to them. The mediator then guides the parties through multiple possible solutions in an effort to reach an agreement, compromise or reconciliation. Another plus for mediation, when compared to arbitration, is that the parties may develop the solution themselves as opposed to having a solution determined for them by a third party. If the parties do reach a resolution and adopt a mediated agreement, the mediated agreement can be binding.

Litigation may have detrimental effects

If the parties are unable to reach a resolution or are dissatisfied with the mediation process, the parties may decide to pursue litigation. Litigation may have detrimental effects on both parties in a dispute. The value of the parties’ interest may be diminished by injunctions, restraining orders or other restrictions imposed by the courts. A variety of disputes can arise from a commercial property lease transaction depending on the terms of the lease, the type of the real estate and the uses of the property. Due to the possible long duration of litigation proceedings, land or floor space may not have the same value at the end of litigation as it did when the dispute arose.

DiJulio Law Group

What is Elder Financial Abuse?

Depriving an elder of money or property is elder abuse

Financial abuse is depriving an elder of money or property, or of control over money or property, by theft, manipulation, undue influence, or fraud. While financial elder abuse can take many forms, the most widespread financial abuses include telemarketing fraud, identity theft, predatory lending and home improvement and estate planning scams.

Who might financially abuse an elder?

Potential financial abusers include: conservators, caregivers, agents acting under durable powers of attorney, trustees, representative payees, financial planners, attorneys, family members and friends.

Signs of elder financial abuse

  • Money or personal items missing without an explanation
  • A depletion of assets without adequate explanation or records
  • A standard of living below the elder’s financial situation
  • Undue interest by the caretaker in the elder’s financial situation
  • A new “best friend” who suddenly moves in
  • Unpaid bills, eviction notices, or notices to discontinue utilities
  • Cash withdrawals or transfers between accounts that the elder could not have made
  • Suspicious signatures on checks or other documents
  • No documentation about financial arrangements
  • Names added to the elder’s financial accounts
  • Bank statements or other bills no longer coming to the house, when the elder is not known to handle their finances electronically
  • Suspicious changes in titles, wills, or other important documents

Remedies for elder financial abuse

The best remedy to prevent elder abuse is by carefully choosing trustworthy people to act as agents, successor trustees or conservators when working with an elder’s finances.You can amend or end a power of attorney or revocable trust if you believe that a person already designated is not acting in an elder’s best interests, you can also demand an accounting.

If there is evidence of mismanagement, the agent also can be required to make restitution to the elder. In California, the reporting person is protected from both criminal and civil liability for reporting abuses. Victims can seek assistance from law enforcement or file a civil lawsuit.

Punitive damages may be imposed if there is evidence of oppression, fraud or malice. If you feel the problem is beyond your control, consider seeking assistance from the state Ombudsman‚ other government agencies‚ or a law firm like ours that focuses on elder financial abuse.

DiJulio Law Group

What are construction defects?

Construction defects may be excluded from home owner’s policies

Almost any condition that reduces the value of a home, condominium, or common area can be legally recognized as a defect in design or workmanship, or a defect related to land movement.Faulty construction is generally excluded from home owner’s policies, although some ensuing damage like a fire due to an improperly installed gas pipe might pass–it’s a gray area.

In California, for any home or condo completed or closed escrow after January 1, 2003, SB 800 (Civil Code Section 895 et seq.) clarified the types of defects that the builders are responsible to fix.

Construction defects in design, workmanship and materials

Examples include, water seepage through roofs windows and sliding glass doors; siding and stucco deficiencies; slab leaks or cracks; faulty drainage; improper landscaping and irrigation; termite infestation; improper materials; structural failure or collapse; defective mechanical and plumbing; faulty electrical wiring; inadequate environmental controls; improper security measures and devices; insufficient insulation and poor sound protection; and inadequate firewall protection.

Construction Defects may result in landslide and earth settlement problems

Examples are expansive soils; underground water or streams; landslides; settlement; earth movement; improper compaction; inadequate grading; and drainage.Structural failures and earth movement conditions can be catastrophic in nature and present both personal injury and substantial property damage exposure. Landslide and settlement conditions may result in collapse of buildings; cracks in slabs, walls, foundations, and ceilings; disturbance of public or private utilities; and sometimes a complete undermining of the structures.

How do I prove that construction defects exists?

In most cases, you will need to hire the services of an independent construction defect expert. Experts are those who have the necessary training, education and experience to give testimony in court as to the cause of a defect. For example, if your roof leaks, a waterproofing expert who has designed effective roofs, evaluated other defective roof systems and knows how roofs should be built would be in a good position to testify. Your   lawyer cannot, in most cases, prove his case against the developer unless he has a qualified expert. Experts are available in nearly every aspect of residential construction.

DiJulio Law Group

California C Corporations

C Corporations, the Standard Model for California businesses

A California C corporation is a standard business model for California businesses. Though not a very flexible structure for some businesses, they often will offer the best protection for shareholders. The defined structure of a C corporation may be a necessity for your business, if you are seeking financing for your business, be it through a bank or through venture capital funds.

Shares are issued by a C corporations and each shareholder becomes an owner in the company. There can be multiple classes of shares each with its own restrictions and benefits, and shares can be sold and new shares can be issued, as needed. A corporation must have at least three directors under California law, unless there are less than three shareholders. In that case, the number of directors may be equal to or greater than the number of shareholders. For example, if the corporation has only one shareholder, the number of directors may be one or two. If the corporation has two shareholders, the number of directors may be two (or three, which is the normal minimum).

How and when taxes are paid for C corporations

California C corporations do have some advantages in how and when taxes are paid. They are taxed as separate entities from their owners. Therefore, they do not undergo pass-through taxation. The income of the California C corporation is taxed before being divided amongst shareholders, when the corporation files its own tax return. Hence, most taxes are paid at the corporate level and are not “passed through” to the shareholder level.

However, the income is taxed again when shareholders file individual tax returns after receiving dividends. This is called double taxation, and can be avoided with S – corporations and California LLCs. As these dividends have already been taxed at the corporate level, they usually qualify for a lower rate of 15 percent upon being taxed at the individual level.

Employees and managing shareholder’s salaries can be deducted from a C corporation’s taxable income. The ability to control the distribution of your profits is the primary tax advantage of California C – corporations. Taxation is controlled by keeping money in the corporate bank account until you are ready distribute the funds the shareholders as dividends, thus paying taxes at the most advantageous time.

DiJulio Law Group

Adverse Possession and California property owners

Adverse possession a concern for California property owners

The relatively obscure principle of “adverse possession” may be demonstrated by the story of a Bay area man who found a suitably abandoned house and simply moved in. The concept of adverse possession is rooted in the belief that society’s best interests are met when property and land are utilized productively rather than sitting fallow.

Steve DeCaprio had become aware of a turn-of-the-century bungalow that had sat vacant for many years. He also knew that the previous owner of the house had died in the early 1980s and that no one had come forward to claim it. The house was in major disrepair.

DeCaprio and a group of friends got to work making the place habitable. He got the water flowing, bought storm doors and painted the exterior, planted vegetation in the front yard, and cut down another backyard tree that posed a hazard to the house next door.

DeCaprio didn’t buy this house but adverse possession says he owns it

DeCaprio didn’t buy this house, but, after more than a decade of struggle, he now owns it through the process of adverse possession. The obscure law called “adverse possession” allows ownership not through purchase or inheritance (the usual paths to home ownership), but through occupation. It only applies when no one else can prove they are the real owner.

In California, adverse possession requires five years of continued use

In California, adverse possession requires five years of continued use which is “open and notorious” and “adverse” to the owner’s interest. The maintenance and upkeep and improvement of the property is required and for the five years of use the property taxes must be paid for the property being adversely possessed.

Through adverse possession, it is possible to gain ownership of just a few feet of property or many acres. Adverse possession is not necessarily intentional on the part of the party that gains possession. It can happen through a legitimate mistake. For example, a neighbor may have relied upon a faulty property description in a deed when building a fence on an adjoining property.

DiJulio Law Group

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