San Diego PortAuthor: Staff

Zoning is an important part of land use planning in nearly every major city in the United States. Local governments usually have jurisdiction over land use issues. Both the City of San Diego and San Diego County have zoning ordinances and procedures for permitting construction and development in different zones. California real estate investors need to be familiar with local zoning ordinances, as well as the restrictions of land use that go along with them, before committing to an investment. While investors should always keep in mind the adage that “you can’t fight City Hall,” it is possible to challenge or change a zoning designation. In San Diego, this can happen in several ways involving the Planning Commission or the City Council. Litigation may also be a means of modifying zoning designations, although it is rarely a first resort.

The Zoning and Rezoning Processes

InsuranceAuthor: Staff

Investing in California real estate is, ultimately, a gamble. Even the most experienced and savvy investor cannot know what will happen to the property years, months, weeks, or even moments from now. Risk management is therefore one of the most important parts of California real estate investment. This may include measures intended to protect the property, such as security and fire suppression systems. It should also involve insurance coverage for various potential risks or losses.

Risk Management and Insurance

San Diego BayAuthor: Staff

San Diego real estate investors need to be aware of land use restrictions, such as restrictive covenants included in a deed, or zoning and other restrictions under city or county laws. Both the City of San Diego and San Diego County have zoning laws that restrict the use of land within their jurisdiction. We will focus on zoning within the City of San Diego.

What Is Zoning?

apartment buildingAuthor: Staff

Apartment buildings can be an excellent investment for California real estate investors. Factors like the size and style of the building, the type of units available, and of course, the location are all important. An apartment building owner can manage the property directly or delegate this role to a manager, but liability for breaches of a lease agreement, or for violations of California landlord-tenant law, will ultimately fall on the owner rather than the manager. California apartment building owners’ legal obligations include making accommodations for accessibility and, under a new law that applies to new construction, providing individual water meters or submetering for each unit. Real estate investors looking into apartment buildings should be aware of the financial risks and legal obligations.

What Is an “Apartment Building” Under California Law?

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Author: Seth Murphy

Seth Murphy first got into doing DIY projects to save money, but over time he has developed a real passion for this hands-on, intensive work. He created papadiy.com to share his ongoing projects and to motivate himself to do more.

When you bought your large family home, you likely had children (both current and future) to consider. You diligently looked for a property with enough bedrooms to house your expanding family and any guests you would have had over the years. Your neighborhood amenities probably mattered, too, and it’s likely that you bought in a development with a playground, sidewalks, and plenty of other families.

beach and horizonAuthor: Staff

Investors in California real estate hope for returns on their investments, but they must also understand the inevitable risks. A real estate investment, whether it involves participating in a real estate syndicate, buying shares in a real estate investment trust or buying land for development, is a business venture. All business ventures involve risk, starting with the loss of the investment principal and continuing to the limits of the imagination. Investors should carefully consider their potential liabilities and plan a business entity accordingly. Proceeding without any formal legal structure creates a sole proprietorship or general partnership, which offers no protection from liability. California law allows real estate investors to form various business entities that can shield them from liability for business obligations, including a limited liability company (LLC).

Liability Protection

partnershipAuthor: Staff

Investing in California real estate is generally considered a business activity, meaning that it is undertaken for the primary purpose of making a profit, as opposed to charity or recreation. Business activities can have important effects on a person’s life and finances, including taxes and other potential liabilities.

When an individual invests in an ongoing venture like a real estate syndicate or a real estate investment trust (REIT), they are buying equity in an existing business. When one or more individuals engage in their own investment activity, such as by buying a house with the intention of flipping it, they have effectively started their own business.

subdivisionAuthor: Staff

Ownership of real property includes various rights regarding the use of that property, but these rights are not absolute. Purchasing a particular piece of property often comes with specific restrictions on its use. Many residential properties are part of a planned development, such as a condominium building or a housing subdivision. Upon purchasing a property that is part of a “common interest development” (CID) under the laws of California, a real estate investor becomes a member of the homeowner association (HOA) for that development. HOAs can have considerable power and influence over their members, so it is important to know one’s rights and obligations before closing a sale.

What Is a Homeowner Association?

San Diego SkylineAuthor: Staff

Many California real estate projects involve common interest developments (CIDs), in which property owners have rights to various common areas in addition to the premises they own outright. In order to provide for the maintenance of common areas, owners of units in a CID are required to be members of a homeowner association (HOA). The HOA has considerable power to regulate the properties within the CID and to collect fees and assessments from members. In California, the Davis-Stirling Common Interest Development Act (“Davis-Stirling”) governs HOAs. San Diego real estate investors are likely to encounter HOAs. New developments will require the creation of a new HOA, while investors who buy existing properties might be bound by HOA rules.

Common Interest Development

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Title Insurance

Author: Alejandro Ramirez.

Alejandro Ramirez, Esq. is the founder of AR | Legal Team.  You can read more of his posts at www.arlegalteam.com. He also works with Bona Law on real estate issues.

All too often, investors and business owners fail to give the title review process its due weight when making a major commercial real estate acquisition, and, as a result, they do not fully understand the title risks involved.

Upon receiving the preliminary title report (Preliminary Report) from the title company, parties sometimes fall into the temptation of skimming through the list of exception items without performing a careful review of the underlying exception documents themselves.  The failure to fully understand the title risks in a deal leads to mismanaged legal and financial risk.

Here are seven reasons to rethink the importance of title review:

  1. Vesting of title. Ownership needs to be fully ascertained to ensure that all seller parties are properly identified in the Purchase and Sale Agreement (PSA), conveyance deed, and any other ancillary documents.  Seems obvious, right? You’d be surprised.
  2. CC&Rs/Restrictive covenants. Covenants, Conditions & Restrictions, commonly called CC&Rs, and other restrictive covenants, should be carefully reviewed to ensure that compliance will not raise any issues for you.  Depending on your intended use, a use restriction can make or break a deal.
  3. Options/Right of First Refusals. Occasionally, options and other similar instruments are used to grant parties certain purchase or sale rights.  Inadvertently bypassing these rights can cause headaches for all.
  4. Easements. The analysis of easements that will survive closing is crucial. There are many kinds of easements (e.g., access, utility, parking, reciprocal, slope and drainage).  An easement may benefit or burden a property.  Buyers should determine if they are willing to live with the terms of the easements involved and whether any such easements will interfere with the buyer’s intended use of the property (and potential future uses by subsequent purchasers).  Oftentimes, certain types of easements (e.g., utility easements) are mistakenly viewed as standard or innocuous, however, buyers should note that the terms of an easement are negotiable.  As a result, the written terms can vary significantly, even as to easements recorded against the same property by the same parties.
  5. There are many forms of encroachments.  An encroachment can expose a buyer to possible liability in many ways.  For example, an encroachment may violate the terms of an easement agreement, or certain encroaching improvements may be subject to removal by the easement holder. In extreme cases, an encroachment may render title unmarketable.
  6. Maintenance Agreements. The maintenance and repair obligations for an easement shared by several owners may be memorialized in a maintenance agreement and recorded against the subject property.  Buyers should determine if they are willing to live with the terms of any applicable maintenance agreements.
  7. Other Unknown or Undisclosed Agreements. Occasionally, pertinent documents may not be provided by the seller. The seller may be unaware of their existence or may have negotiated these documents years ago, but may not remember or think to provide them along with the other due diligence deliverables.  However, their existence can sometimes be discovered if the document appears in the Preliminary Report or if it is mentioned in another document appearing in the Preliminary Report.

The above list is not exhaustive.  In some instances, depending on the context, a comprehensive title review may reveal issues that may justify a price reduction, especially if the seller understands that the issue would similarly affect a sales transaction with any other prospective buyer. An experienced real estate attorney will also be instrumental in reviewing the title commitment and proforma title policy, and suggesting applicable endorsements.

Tips for Carrying Out an Effective Title Review:

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