Obstructed View Ruling a Good Lesson for Orange County Homebuyers

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The rigid nature of California’s laws on an obstructed view was recently illustrated in a case heard by the California Court of Appeal. The case is Boxer vs. City of Beverly Hills.

orange-county-lawyer-hammerThe City of Beverly Hills planted some redwood trees in a park near the Boxers’ home. At first, the trees were not a problem for the Boxers, but as they began to grow, and redwoods can grow quite tall, the Boxers began to lose their stunning views of the Hollywood Hills and Los Angeles Basin. They had enjoyed these views for some time. But the problem for the Boxers was even worse than the loss of the daily enjoyment of the view. The Boxers own a very nice property in Beverly Hills. The view significantly enhanced the value of their property, as is often the case with truly impressive views. This was not, therefore, a trivial concern for the Boxers, but a serious financial problem.

The Boxers did not rush off to court right away due to the obstructed view. Beginning in 2005, they sought redress with the City, through correspondence and negotiation. They were continuously ignored, however, so they eventually had no choice but to pursue their remedies in the Los Angeles Superior Court.

The theory pursued by the Boxers was that the law of “inverse condemnation” should apply to the City’s activity with the obstructed view.  Inverse condemnation is a legal term for the situation wherein the government takes private property without paying appropriate compensation. Here, the Boxers argued that the growth of the redwoods undermined the value of their property through the obstructed view, causing monetary damages. The Boxers further argued that the loss they were suffering from the City’s refusal to cut the trees was massive, whereas all the City would lose if it cut the trees was the expense of the tree cutters.

The Boxers, unfortunately, would not find any help in the courts, at any level. The Superior Court threw out their suit, and the Court of Appeal affirmed the lower court’s decision. California’s doctrines on obstructed views are rigid. In the state of California, as a matter of law, there is no remedy for the mere impairment of view as it pertains to private property.

The Court clarified that obstructed views, in and of themselves, can never be the basis for an inverse condemnation case. Other factors may provide sufficient grounds for a lawsuit, when combined with the loss of a view. For example, noxious fumes emanating from a source related to government activity, or physical encroachment and damage, together with the loss of a view, may enable court action.  But loss of view itself does not make the grade.

One way to protect a homeowner’s view is to enter covenants (recordable agreements that run with the land and identify the affected properties) or easements, whereby a neighbor agrees that no building will go forward on his or her property that will undermine a view. To make the covenants or agreements enforceable, landowners record them with the county recorder’s office, and often pay consideration, to avoid a claim down the road that the agreements are unenforceable or “lack consideration.”

California offers its residents some truly breathtaking views, but it is important for potential homeowners to note that in the state of California, there is no firm “right” to a view. Homebuyers, particularly looking at homes on the higher end of values, should keep this in mind when inspecting homes for sale.  If you are threatened with the loss of a view, or have been notified that court action may be sought against you by a neighbor for your own building activity, contact us through hammers-law.com.  A property owner’s right to enforce a view requires very specific elements and you want to be sure that all such elements are satisfied before initiating legal action.

California Attorney Busted for Business Fraud in San Diego

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It may come as little surprise, but attorneys can, and often do, commit business fraud. Unfortunately, in the wake of the financial meltdown in 2008, numerous “mortgage attorneys” have found themselves at the center of controversy, and in some cases, behind bars.  A recent example is the case of Arizona Attorney Jeffrey Greenberg, who, together with Coronado businessman Courtland Gettel, was charged with extensive fraudulent activity involving home loans, fake San Diego lien releases, and fraudulent Arizona rehab loans.

Greenberg and Gettel pleaded guilty in a San Diego federal court on May 17th to charges of conspiracy and wire fraud conspiracy. In reaching their deal, both defendants agreed to forego profits from fraudulent land deals they made and to pay restitution.

Greenberg used his legal knowledge and real estate experience to help his co-conspirators gain access to loans (mortgages) against multi-million dollar properties in La Jolla and Delmar, California. How did he do this? He and his co-conspirators filed bogus lien releases with the San Diego County’s Recorder’s Office that made it look like the properties were free and clear of prior loans. He then helped his “clients” apply for new loans against the same property from new lenders. Then, they put the funds received from the lenders in their pockets and defaulted on the loans, leaving the lenders to fight amongst themselves to seize the collateral. Another co-conspirator was a notary public who notarized fraudulent documents, recorded them in her book, then reported the book stolen to the state of California.

The fraud in Arizona began with co-defendant Gettel, who had a real estate investment company in that State. Using that company, co-defendant Greenberg helped other co-defendants apply for real estate rehabilitation loans. They never used the money for that purpose, of course. The money went towards the co-defendants’ personal expenses.
This fraudulent activity went on for more than a year and involved 8 multi-million dollar loans. Altogether, the co-defendants’ business fraud resulted in losses of $33.6. To make matters worse, Attorney Greenberg used his client trust account for these fraudulent deals, which of course violates the State Bar Rules of Professional Responsibility.

There are some important takeaways from this story. First, please note that attorneys involved in business fraud (mortgage or otherwise) are a small number of bad apples in the barrel…they aren’t the whole barrel!

Second, it is really difficult for people like Greenberg and Gettel to get away with business fraud in the area of real property. Real property transactions are matters of permanent public record, because real estate sales transactions are recorded in the County Recorder’s office.  Critical pieces of evidence are available for all eyes to see, for all time. In other words, you can run but you cannot hide from recorded transactions, and they typically provide detectives and prosecutors with important initial evidence upon which to build a case.  When prosecutors are diligent, they’re usually going to bust the bad guys on these deals.  orange-county-lawyer-hammerThat certainly happened in this case.

Further details of portions of this story are available in the San Diego Reader article entitled “Real Estate Fraudsters Stole More Than 30 Million.”

To talk more about real estate fraud, business fraud, or any related wrongdoing, please do not hesitate to contact Stephen Hammers at hammers-law.com.