Los Angeles Lawyer January 2016
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REAL ESTATE LAW 31st ANNUAL THE MAGAZINE OF THE LOS ANGELES COUNTY BAR ASSOCIATION ISSUE JANUARY 2016 / $5 EARN MCLE CREDIT PLUS Foreigner Purchase Property of California Line Real Estate Disputes page 23 page 28 Cell Phone Infrastructure page 11 Construction Defect Litigation page 14 On Direct: Daniel Grigsby Securities page 8 Breach Los Angeles lawyers Nader Pakfar (center), Kelsey Thayer (left), and Karli Baumgardner inform borrowers of the risks of nonrecourse carveouts of CMBS page 18 FEATURES 18 Securities Breach BY NADER PAKFAR, KELSEY THAYER, AND KARLI BAUMGARDNER Since 2008, courts have tended to interpret CMBS agreements strictly, allowing for even harmless breaches to trigger full recourse 23 Homes away from Home BY VANJA HABEKOVIC Corporate structures may be used to address income and property tax considerations in a foreign person's purchase of California residential real estate Plus: Earn MCLE credit. MCLE Test No. 253 appears on page 25. 28 Boundary Issues BY ANDREW R. HENDERSON Real estate buyers should be aware that under the agreed boundary doctrine, recorded lot lines may be relocated Los Angeles Lawyer DEPARTME NTS the magazine of the Los Angeles County 8 On Direct 14 Practice Tips Bar Association Daniel M. Grigsby The effect of Brisbane on the construction January 2016 INTERVIEW BY DEBORAH KELLY defects statute of limitations BY JOHN BRAZIER Volume 38, No. 10 10 Barristers Tips Enforcing no-contest clauses in the face 36 Closing Argument COVER PHOTO: TOM KELLER of anti-SLAPP motions Videoconferencing can help our courts BY EUNICE Y. LIM AND DOUGLAS E. LAWSON and improve access to justice BY BRIAN S. KABATECK AND BENJI AZIZIAN 11 Practice Tips New requirements facilitate wireless infrastructure development BY LYNN WHITCHER, CYNTHIA HANSON, DANIEL LOS ANGELES LAWYER (ISSN 0162-2900) is published monthly, except for a combined issue in July/August, by the Los Angeles GOODRICH, AND BENJAMIN ESTES County Bar Association, 1055 West 7th Street, Suite 2700, Los Angeles, CA 90017 (213) 896-6503. Peri odicals postage paid at Los Angeles, CA and additional mailing offices. Annual subscription price of $14 included in the Association mem- bership dues. Nonmember sub scrip tions: $38 annually; single copy price: $5 plus handling. Address changes must be sub- mitted six weeks in advance of next issue date. POSTMASTER: Address Service Request ed. Send address changes to Los Angeles Lawyer, P. O. Box 55020, Los Angeles CA 90055. 01.16 VISIT US ON THE INTERNET AT WWW.LACBA.ORG/LALAWYER E-MAIL CAN BE SENT TO [email protected] EDITORIAL BOARD Chair DONNA FORD Articles Coordinator TED M. HANDEL Assistant Articles Coordinator JOHN C. KEITH Secretary SANDRA MENDELL Immediate Past Chair MARY E. KELLY JERROLD ABELES (PAST CHAIR) K. LUCY ATWOOD ETHEL W. BENNETT SCOTT BOYER EMILY BRAILEY CHAD C. COOMBS (PAST CHAIR) HON. MICHELLE WILLIAMS COURT SAMIRE K. ELHOUTY GORDON K. ENG STUART R. FRAENKEL MICHAEL A. GEIBELSON (PAST CHAIR) CHRISTINE D. GILLE SHARON GLANCZ STEVEN HECHT (PAST CHAIR) DENNIS HERNANDEZ ERIC KINGSLEY KATHERINE KINSEY DANIELLE LACKEY JENNIFER W. LELAND PAUL S. MARKS (PAST CHAIR) COMM’R ELIZABETH MUNISOGLU PAUL OBICO TYNA ORREN CARMELA PAGAY DENNIS L. PEREZ (PAST CHAIR) GREGG A. RAPOPORT GARY RASKIN (PAST CHAIR) JACQUELINE M. REAL-SALAS (PAST CHAIR) STEVEN SCHWARTZ HEATHER STERN MATTHEW D. TAGGART DAMON THAYER COZETTE VERGARI THOMAS H. VIDAL STAFF Editor ERIC HOWARD Art Director LES SECHLER Director of Design and Production PATRICE HUGHES Advertising Director LINDA BEKAS Administrative Coordinator MATTY JALLOW BABY Copyright © 2016 by the Los Angeles County Bar Association. All rights reserved. Reproduction in whole or in part without permission is pro - hibited. Printed by R. R. Donnelley, Liberty, MO. Member Business Publications Audit of Circulation (BPA). The opinions and positions stated in signed material are those of the authors and not by the fact of publication necessarily those of the Association or its members. All manuscripts are carefully considered by the Editorial Board. Letters to the editor are subject to editing. 4 Los Angeles Lawyer January 2016 LOS ANGELES LAWYER IS THE OFFICIAL PUBLICATION OF THE LOS ANGELES COUNTY BAR ASSOCIATION 1055 West 7th Street, Suite 2700, Los Angeles CA 90017-2553 Telephone 213.627.2727 / www.lacba.org LACBA EXECUTIVE COMMITTEE President PAUL R. KIESEL President-Elect MARGARET P. STEVENS Senior Vice President and Treasurer MICHAEL K. LINDSEY Vice President DAVID K. REINERT Assistant Vice President BRIAN K. CONDON Assistant Vice President DUNCAN W. CRABTREE-IRELAND Assistant Vice President HON. BRIAN S. CURREY Immediate Past President LINDA L. CURTIS Barristers President ROBERT S. GLASSMAN Barristers President-Elect DAMON A. THAYER Chief Executive Officer/Secretary SALLY SUCHIL Chief Financial & Administrative Officer BRUCE BERRA General Counsel & Chief Administrative Officer W. CLARK BROWN BOARD OF TRUSTEES HARRY W.R. CHAMBERLAIN NATASHA R. CHESLER REBECCA A. DELFINO MIGUEL T. ESPINOZA KENNETH C. FELDMAN JO-ANN W. GRACE HARUMI HATA STACY R. HORTH-NEUBERT SAJAN KASHYAP MARY E. KELLY LAVONNE D. LAWSON F. FAYE NIA ANNALUISA PADILLA JUAN A. RAMOS SARAH V.J. SPYKSMA DAVID W. SWIFT JEFF S. WESTERMAN ROXANNE M. WILSON AFFILIATED BAR ASSOCIATIONS BEVERLY HILLS BAR ASSOCIATION CENTURY CITY BAR ASSOCIATION CONSUMER ATTORNEYS ASSOCIATION OF LOS ANGELES CULVER MARINA BAR ASSOCIATION GLENDALE BAR ASSOCIATION IRANIAN AMERICAN LAWYERS ASSOCIATION ITALIAN AMERICAN LAWYERS ASSOCIATION JAPANESE AMERICAN BAR ASSOCIATION JOHN M. LANGSTON BAR ASSOCIATION LESBIAN AND GAY LAWYERS ASSOCIATION OF LOS ANGELES MEXICAN AMERICAN BAR ASSOCIATION PASADENA BAR ASSOCIATION SAN FERNANDO VALLEY BAR ASSOCIATION SANTA MONICA BAR ASSOCIATION SOUTH BAY BAR ASSOCIATION SOUTHEAST DISTRICT BAR ASSOCIATION SOUTHERN CALIFORNIA CHINESE LAWYERS ASSOCIATION WOMEN LAWYERS ASSOCIATION OF LOS ANGELES Los Angeles Lawyer January 2016 5 ffordable housing—an oxymoron tormenting virtually every prospective homeowner or tenant scrambling to Afind a decent place to live in Los Angeles. If you think it is tougher to become a homeowner in San Francisco or San Jose, think again. And if you believe it is relatively easier on the pocketbook to be a renter here than New York City, you would be equally wrong. Statistics paint a dismal picture of the L.A. housing market. In August 2015, the UCLA Luskin School of Public Affairs released a study titled “Impacts of the Widening Divide: Why Is LA’s Homeownership Rate So Low?” Its authors point out that “The Los Angeles metro area…has the lowest homeownership rate among metropolitan areas in the U.S.” The percentage of homeowners in this county is 46, while in New York City it is 52 percent and 54 percent in the Bay Area. It is also considerably below the national average of 64 percent. In addition, the UCLA study comments that the metropolitan statistical area of Los Angeles “has the highest average housing burden and new owner costs.” Local renters face an increasing financial burden too. In a press release published last August, Zillow indicates that in the second quarter of 2015 local tenants paid 48.9 percent of their income in rent, as opposed to 35.6 percent between 1985 and 2000. In contrast, in the New York-Northern New Jersey area the percentage is 41.3. Whatever the city, more dollars spent on rent means less to buy groceries, pay car expenses or Metro fares, obtain insurance, and have a little left over for discretionary activities or savings. A variety of factors have contributed to this housing crisis. Stagnant wages is a key one. As a Los Angeles Times editorial, “How to get more affordable housing in Los Angeles,” observed in August 2015 that “Housing prices in Los Angeles have grown four times faster than incomes since 2000.” Similarly, the UCLA study cited above notes, “Since 1970, renters in Los Angeles, particularly those in the bottom income quartile, have been severely burdened, paying more than 30% and increasingly 50% of their income in rents.” Land use regulations also play a significant role. As planner and professor Greg - ory D. Morrow described in a Los Angeles Times op-ed piece last July, “For much of the last 40 years, planning in Los Angeles has been guided by the idea that growth is bad, that more people mean more congestion, pollution and social ills. The city has emphasized ‘downzoning’—reducing the number of units allowed to be built on properties—to actively curb growth. It hasn’t worked.…since 1970, half a million more people have moved to Los Angeles than were planned for.…” With 2016 being an election year, the forecast is for continued hand wringing by candidates about the Los Angeles housing crisis. Once the electorate has spoken in November and public officials feel momentarily motivated to demonstrate a capacity to act, perhaps the scarcity of new housing development initiatives will be replaced with those actually leading to more affordable single-family homes and apartments being built. This includes adoption of local inclusionary zoning ordinances for market-rate residential developments and adoption of state and federal tax incentives to promote housing. For those looking for a clean, decent, safe place to put their feet up after a hard day at work, the hope is that speeches are replaced with real change beginning now. n Ted M. Handel’s practice with the Business and Real Estate Group of Valensi Rose, PLC, focuses on real estate transactions and corporate law matters. He is the coordinating editor of the Real Estate Law special issue of Los Angeles Lawyer. 6 Los Angeles Lawyer January 2016 on direct INTERVIEW BY DEBORAH KELLY Daniel M. Grigsby General Counsel of the Los Angeles Lakers their own brand. They want a place that is The reasons for each system are inherent in social-media friendly and that allows them the nature of the sports to which they apply. to best prepare for their playing careers.