Real Property/HOA Disputes

Representative Cases

Hon. David R. Chaffee (Ret.)
Mediator • Arbitrator • Discovery Referee

• Neighbor dispute in which plaintiff alleged that neighbor operated an illegal construction business constituting a continuing private nuisance that had continued for years. The lawsuit encountered substantial statute of limitations issues for events that had occurred more than two years prior to the date of filing.
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• This action involved the parties’ rights and restrictions with regard to a zero lot line that artificially separated their properties but was not the true lot line. The parties’ lots overlapped and the owners had reciprocal easements for the front and rear yards. Moreover, the CC&Rs restricted the use of the rear yard easement area, allowing it to be used only for recreational and gardening purposes, including landscaping subject to Architectural Committee approval. In landscaping the easement area, defendants allowed soil to be placed against the plaintiff’s exterior house wall, oriented their sprinklers to water toward that same wall, and failed to install adequate drainage. During damage remediation efforts, defendants repeatedly denied access to the easement area to repair crews.
  
  
• Dispute involving CC&Rs for an ocean view bluff front lot, which restricted building within 10 feet of the rear yard setback to prevent view obstruction from adjoining homes. Three homes built years earlier had structures within the 10 foot rear yard setback. Plaintiff purchased the lot with a tear-down house and proposed to build a new house, part of which would be within the 10 foot rear yard setback. Defendant HOA denied plaintiff’s architectural application. Plaintiff sued alleging breach of restrictive covenants against the HOA and neighbor whose home projected into the 10 foot setback; breach of fiduciary duties against the HOA; negligence; declaratory relief; and mandatory injunctive relief against the HOA and neighbor.
  
  
• Defendants owned an ocean view residence in a development governed by plaintiff pursuant to HOA CC&Rs. After defendants began constructing their landscaping, the parties got into a dispute about whether defendants were following the plans they had submitted and had been approved by plaintiff. Plaintiff’s lawyer sent a letter to defendants demanding that they stop any further work that plaintiff had not approved. Defendants decided to continue building. Plaintiff then levied $1,000 per month fines for each of two violations of the CC&Rs which ultimately totaled $63,500. Plaintiff filed an action against defendants for breach of the CC&Rs, nuisance and declaratory relief.
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• Plaintiff, a corporate entity formed for the purpose of investing in real estate, purchased a portfolio of property from defendant LLC, a portfolio acquired from Fannie Mae and purchased “as is.” Defendant sold the portfolio to plaintiff “as-is, where is, through quit claim deed.” One of the sections of the sales agreement provided none of the property taxes or assessments would be prorated and purchaser was liable to pay all property taxes, assessments, liens and any other encumbrances on the properties. One of the properties was located in Laguna Woods. Shortly after sale, the Laguna Woods Mutual No. Fifty, the HOA for the condominium development that included the property, sued to recover the monthly homeowners dues owed and still accruing on the property in an amount in excess of $60k. Plaintiff sued defendant for fraud, restitution, breach of contract and declaratory relief.
  
  
• Plaintiff sued bank for a violation of the unfair competition law (B & P sec. 17200 et seq.) alleging defendant’s initiation of a non-judicial foreclosure was fraudulent because defendant no longer had any interest in the loan after it was securitized.
  
  
• Plaintiffs purchased a house from defendants. Plaintiffs contended that defendants misrepresented and failed to disclose facts regarding the condition of the house, further contending that they would not have purchased the house if defendants had provided them with the true facts. Defendants had purchased the home at a foreclosure sale and hired a contractor to perform work on the property - specifically to repair damage caused by water, dry rot, and pests. Two or three months later, defendants sold the house to plaintiffs after making disclosures of “known material facts and defects.” Some months later, plaintiffs experienced water intrusion on the property and learned that defendants had allegedly failed to disclose certain defects in the property.
  
  
• Plaintiffs own a home in Laguna Beach at the top of a slope that goes down to the beach and ocean. When they built their house, they built it as close to the edge of the slope as possible. Their new plan to conduct “backyard” construction would have to take place on the downslope. Defendant city contended that conditions placed on the earlier home construction categorically precluded any downslope development. The earlier conditions included the words “no encroachment onto the slope area.” Issues included other nearby properties where slope encroachment was clearly visible.
  
  
• A development was originally constructed as an 18 apartment building, each with four units, on one large lot. It was subsequently subdivided into 18 individually owned lots consisting of one four-plex each and three common area lots. The developer retained ownership and subsequently transferred title to a third party of the three common area lots. The purchaser of the common area and the HOA agreed to the payment of a monthly fee in the form of a lease. As a result, the HOA dues were set at $1,200 per month. Defendants acquired the lots in foreclosure, but were unaware of the outstanding HOA dues assessments as no lien had been recorded. Plaintiff sued for $53,000 in unpaid assessments.
  
  
• Defendants purchased a one acre parcel adjacent to plaintiff’s six acre home and land. Defendants obtained approval to build a house on their lot, and also obtained approval for the city to remove over 40 trees from their parcel. The tree removal resulted in several of plaintiff’s trees also being cut down in the process. Plaintiff’s action included causes of action for trespass to land, negligence, intentional infliction of emotional distress and fraud. Plaintiff sought double damages pursuant to Civ. Code sec. 3346(a), and also sought punitive damages.
  
  
• Defendant issued a title insurance policy covering property sold by plaintiff on which plaintiff took back a second deed of trust. The deed named the wrong persons as trusters. By the time the deed was reformed, plaintiff was unable to sell her interest in the property at a trustee’s sale. Plaintiff sued defendant for negligence, breach of fiduciary duty and fraud. She alleged defendant failed to timely discover the error in the deed and then concealed the error from her. Subsequently, plaintiff sued defendant for breach of contract for failing to pay her claim under the title insurance policy.
  
  
• Dispute involving whether the real estate brokers representing a seller of residential real property were under an obligation to the buyers of that property to disclose that it is over encumbered and cannot be sold to them at the agreed upon purchase price unless either the lenders agree to short sales or the seller deposits $392k in cash into escrow to cover the shortfall.
  
  
• Plaintiff, a rental tenant with Section 8 rental assistance, was evicted via a 90 day notice of termination of tenancy and an unlawful detainer judgment for his allegedly disruptive conduct while in residence. Subsequently, that judgment was reversed because the action was improperly filed prior to the expiration of the 90 day notice period. Plaintiff sued defendant apartment owners for more than $9k for rent and storage, and for refusal to return his security deposit. Plaintiff alleged causes of action for wrongful eviction, retaliatory eviction, discrimination, misrepresentation and restitution of security deposit, and punitive damages.
  
  
• Neighbor dispute in which plaintiffs alleged defendants violated community CC&Rs by planting trees that would damage a drainage system, stored their garbage cans in a common area, parked their vehicles in front of plaintiffs’ home, stored unsightly and excessive chairs and tables in their backyard open to plaintiffs’ view, and planted bushes alongside a common “pony wall” which had grown to a height where plaintiff’s ocean view was partly obstructed.
  
  
• Real estate broker commission action. Plaintiff broker entered listing agreement with defendant home seller for a 6% commission. Defendants subsequently accepted an offer from buyers for $2.3 million. The buyers later failed to timely complete the purchase notwithstanding that the seller fully performed its obligations under the terms of the contract. The listing agreement expired by its own terms and seller hired a new broker. The property was then sold for a little more than $2.3 million, but plaintiff received no commission or compensation of any kind. Plaintiff claimed third party beneficiary to the contract that was breached by the original buyer.
  
  
• Homeowner/HOA dispute. Defendants made several improvements and modifications to the exterior of their home, in each case failing to submit a proposal to the architectural review committee as required by the CC&Rs. The following year, they denied the Association access to a part to their property designated a landscape maintenance area subject to easement for access. Plaintiff HOA sought a declaration that the defendants violated the CC&Rs and injunctive relief.
  
  
• Landlord/tenant dispute. Defendant tenant in a short term residential lease agreed to be responsible for “all maintenance.” After the lease term expired, plaintiff landlord sued to recover unpaid rent as well as to hold the tenant liable for extensive repair costs, including termite inspection and repairs, partial reproofing replacement of the pool heater, and plaster work on the pool. The issue was whether tenant should be held liable for repairs caused by preexisting defective conditions in the property.
  
  
• Defendant, the owner of a commercial property, entered into an agreement with plaintiff real estate broker to lease the premises. After plaintiff had made contact with a potential lessee, defendant entered into a new agreement with the potential lessee’s real estate agents under which those agents would represent both plaintiff and the potential lessee in connection with leasing the premises. Defendant purported to terminate plaintiff’s leasing agreement and attempted to structure and time the leasing transaction so as to avoid any liability to plaintiff for the commission due under his contract.
  
  
• Plaintiff has served as chair of a committee created by the board of directors of her HOA to study a termite infestation problem. The board rejected the committee’s proposed CC&R amendment requiring the association to assume responsibility for termite eradication in every home. Plaintiff’s efforts to have the amendment passed directly by a supermajority of homeowners failed. Plaintiff then sued the HOA and several board members in their individual capacity alleging breach of an oral or implied contract with the termite committee, fraud, violation of the board’s fiduciary duty, and other contract and tort claims.
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• Plaintiff entered a contract to sell a Newport Beach house it owned for almost $8 million to buyers. Buyers hired defendants to conduct a property inspection. While conducting the inspection, defendant stepped on and broke a fire sprinkler pipe in the attic, causing the attic to flood and water damage to the floor below. Cost of repair was $67.5k. Buyers cancelled purchase and defendants paid the water damage bill. Plaintiff sued defendants for negligence, seeking the difference between the canceled contract price and the price at which the house ultimately sold (characterized as “lost profits”) and “holding costs” incurred in maintaining the property until it was sold.