REACH

THIS ISSUE: In September 2007, we reported on a court of appeal decision holding that an option purchase agreement in a residential lease was unenforceable because it was too uncertain. Recently, however, the California Supreme Court has reversed that decision, finding that even though the option was not perfect, it was nevertheless sufficiently certain to be enforced.

THIS ISSUE: Commercial property tenant improvements can be costly. In an economic environment where tenants may be financially uncertain, can property owners protect themselves from mechanic’s liens relating to those tenant improvements?

THIS ISSUE: Typically, courts do not interpret an easement as an “exclusive use” right in land, since such a use would preclude all others – including the owner of the land – from using it. But one recent case held that the clear language of a granted easement created just such an exclusive use right, entitling the easement holders to use the land without interference of any kind from anyone, including the fee owners of the land.

THIS ISSUE: The California Court of Appeal recently held that some guarantors may be liable for a loan deficiency judgment after a foreclosure sale on real property, while others may not.1 The decision follows long California precedent, but may be ripe for legislative review regarding the inherent risks in personal guaranties during a real estate foreclosure.

THIS ISSUE: One person’s ownership of two parcels of land will extinguish easements benefitting either of the parcels through the process of “merger.” But what happens when the parcels are owned by multiple parties?

THIS ISSUE: How can parties to a construction contract guard against the inadvertent loss of contractual rights to arbitration in lien enforcement proceedings?

THIS ISSUE: When does an option to purchase real property become an enforceable contract of sale? Can an option agreement be unilaterally cancelled?

THIS ISSUE: Most residential purchase agreements contain a mandatory mediation agreement. California courts have upheld this provision, and the resulting waiver of the right to recover attorney fees for breach.