In October’s Legal Corner, I discussed how the law prevents a person from being a guarantor of his or her own debt, and why this principle prevents the circumvention of the anti-deficiency. Simply stated, a creditor cannot get around the anti-deficiency laws by having the debtor sign a guaranty along with the note and deed [...]
Author Archives: James Freeman
Guarantees and the Anti-Deficiency Laws
October 1, 2000 – 6:26 pm
California law strictly limits the right of a creditor to recover a deficiency judgment when the amount of the debt exceeds the value of the real property security. No deficiency may be recovered following a nonjudicial foreclosure (trustee’s), or on a purchase money obligation. Even following a judicial foreclosure, the amount of the foreclosure is [...]
Statement By A Junior Lienor
September 1, 2000 – 6:18 pm
The usual form of promissory note permits the holder of the note to accelerate payment of all sums of principal upon a default. In California, there is a statutory right of reinstatement that modifies this right to accelerate on default when the note is secured by real property collateral. If a promissory note is unsecured [...]
Construction Defect Claims: Who Can Sue
August 1, 2000 – 6:13 pm
Defects in the design and construction of property may not show up until years after the property is constructed. During those years, the property may have changed hands. In such cases, may the subsequent owners sue on a claim for defective design or construction?
The answer is generally, yes. The architect or contractor has a duty [...]
A Primer on Foreclosure
July 1, 2000 – 6:06 pm
In California, there is only one remedy to collect a debt secured by a mortgage or deed of trust on real property. That remedy is foreclosure. The party holding a note secured by real property cannot waive the security and sue independently on the note. For this reason it is important to understand some of [...]
Contractors and Construction Defects
June 1, 2000 – 5:58 pm
A building contractor who constructs improvements pursuant to a construction contract owes a duty to the owner of the property to build the improvements according to the plans and specifications and to perform the work in a good and workman-like manner. If the improvements are negligently constructed, the contractor is liable to the owner for [...]
Cancelling Home Improvement Contracts
May 1, 2000 – 5:41 pm
In California, contracts for home improvement are strictly regulated.  A home improvement is the repairing, remodeling, altering, converting, modernizing or adding to residential property.  It includes a wide range of construction, ranging from storm windows to swimming pools, structural improvements to landscaping.
One of the important features of a home improvement contract is the ability of the homeowner [...]
Residential Boundary Line Disputes
April 1, 2000 – 5:33 pm
When residential property is bought and sold, the sale is rarely accompanied by a survey of the property. Usually, the parties will rely on fences or other visible indication of the boundaries, and occasionally the seller may represent the location of the corners or the boundaries of the property. Sometimes, the fence or other boundary [...]
Liquidated Damages In Real Estate Contracts
March 1, 2000 – 5:26 pm
A liquidated damages clause in a real estate contract is a provision whereby the parties agree in advance to the amount of damages a seller will suffer in the event the buyer breaches the contract. California law provides that a liquidated damages clause is presumptively valid if certain requirements are satisfied.
Any provision for liquidated damages [...]
The Sold Out Junior
February 1, 2000 – 5:22 pm
When the holder of a senior deed of trust forecloses, the holder of a junior deed of trust may face a difficult decision. The junior has several options.
First, the junior can cure the default on the senior deed of trust. The usual deed of trust provides that any such advance will be secured by the [...]
