A look at recent court cases affecting real estate.
Coastal Commission’s review substitutes for county’s EIR
A county received an application for a coastal development permit. After conducting the required initial review of the proposed coastal development under the California Environmental Quality Act (CEQA), the county determined an environmental impact report (EIR) was not necessary, adopted a mitigated negative declaration, and issued the coastal development permit. An environmentalist objected to the permit and appealed to the Coastal Commission for an environmental review. The Coastal Commission concluded the proposed development posed a substantial impact. The developer modified the proposed development to address the impact, and the Coastal Commission upheld the county’s permit for the project. The environmentalist claimed the permit was still invalid since the county had failed to order an EIR under the CEQA. The county claimed the permit was valid since the Coastal Commission’s environmental review became the final authority upon appeal of the permit, and the Coastal Commission’s environmental review was a substitute for the county’s EIR. A
Tenant’s dangerous dog
A landlord leased his condominium unit to a tenant knowing the tenant owned a Jack Russell Terrier. The landlord never saw the tenant’s dog, never received complaints about the dog’s behavior, and was unaware the dog might be dangerous. The dog jumped on the occupant of a neighboring unit, causing him to fall and injure himself in the common area of the project. The neighbor sought compensation from the landlord for the injuries. The neighbor claimed the landlord was liable for his injuries since the landlord, knowing his tenant’s dog was a Jack Russell Terrier, knew, or should have known, the dog’s particular breed has traits and characteristics that pose a risk of harm to humans. The landlord claimed he was not responsible for the neighbor’s injuries since he did not actually know the dog was dangerous. A
Also at issue in this case:
Landlord not responsible for nuisance created by tenant’s dog
A landlord leased his condominium unit to a tenant who was permitted to occupy the unit with his dog. The tenant allowed his dog to run off-leash and urinate and defecate in the common areas. However, the landlord never received complaints about the dog’s behavior and renewed the lease. The neighbor sought compensation from the landlord for loss of use and enjoyment of the common areas, claiming the landlord was responsible for the nuisance created by his tenant’s possession of the dog. The landlord claimed he was not responsible for the tenant’s dog’s interference with the neighbor’s use and enjoyment of the common areas since the landlord was unaware at the time the lease was renewed that the dog’s behavior might be a nuisance. A
Also at issue in this case:
Landlord not liable under CC&Rs for tenant’s actions
A landlord leased his condominium unit to a tenant who owned a dog. While unrestrained by a leash, the dog caused the occupant of a neighboring unit to fall and injure himself, causing him to incur money losses. The Covenants, Conditions, and Restrictions (CC&Rs) of the project require pet owners to restrain their pets while in common areas and impose responsibilities on a condo owner for the actions of his tenant. The neighbor claimed the project’s CC&Rs constituted a contract which the landlord breached since both the tenant and the landlord failed to compensate the neighbor for his expenses for an injury caused by the unrestrained tenant’s dog. The landlord claimed the CC&Rs are not a contract since the CC&Rs did not obligate the landlord to act as a guarantor for his tenant’s liabilities if his tenant failed to pay the neighbor for losses caused by the tenant’s dog. A
Editor’s Note – The landlord would have avoided this litigation had the lease with the tenant required the tenant to obtain tenant (homeowner’s) insurance and the tenant complied by obtaining the hazard insurance.
HOA assessments may be based on voting power
The Covenants, Conditions, and Restrictions (CC&Rs) of a condominium project assigned assessments for the cost of maintenance and improvement of the common area of the project to unit owners according to the number of voting interests each owner held. The number of assessment interests attached to a unit was equal to the number of votes held by each unit’s owner, which were assigned to individual units without reference to its value, size, or location. An owner sought to recover money from the homeowners’ association (HOA) for unfair business practices, claiming the HOA’s method for allocating assessments was unenforceable since the assessments were not based on value, size, or location, and thus the allocation of assessments was determined arbitrarily. The HOA claimed its method for allocating assessments was enforceable since the assessment allocated to each unit was equal to the number of votes held by each unit’s owner, and thus was not determined arbitrarily. A
Arbitrator cannot revise his erroneous decision
A homeowner sued an insurance company for breach of contract, bad faith, and fraud under his homeowner policy issued by the insurer. The homeowner and the insurance company agreed to submit the dispute to arbitration for a decision, which would be final and not open to challenge. The arbitration agreement limited the decision of the arbitrator to an award for the amount of money the insurance company was to pay the homeowner. However, the arbitrator provided a written opinion with his award of money explaining the arbitrator’s reasoning for his award, which was erroneous. After the award was made, the owner requested the arbitrator to reconsider his opinion. The arbitrator issued a written order stating he would modify his award if a court ruled he had the authority to do so. A court then held the arbitrator could not revise his award and entered judgment based on the original award. The owner sought to vacate the judgment and return the case to arbitration, claiming the arbitrator exceeded his power by writing an opinion which based his award on an erroneous defense. The insurance company claimed the arbitrator could not revise his award since both parties had agreed the arbitration award was to be final. A
UD judgment imposes duty of care on landlord
A nonresidential landlord filed an unlawful detainer (UD) complaint against a tenant who continued to occupy the property even though he was in default under the lease. At trial on the UD action, the landlord was awarded possession of the property. The tenant was not immediately evicted and continued to operate his business after the court issued a writ of possession. A customer of the tenant, while on the leased premises, slipped and fell, injuring himself due to an unsafe condition caused by lack of maintenance. The customer sought to recover his losses from the landlord for his injuries, claiming the landlord owed the customer a duty of care, which included the inspection and discovery of the dangerous condition since the tenant was in default on the lease and was no longer rightfully in possession of the property at the time of the injuries. The landlord claimed he was not responsible for the customer’s injuries since he did not owe the customer a duty of care to inspect and discover the dangerous condition while the tenant was still in actual possession and operating his business. A
Editor’s note – The court indicated the landlord might have had the duty to inspect the property to protect customers of the tenant when the tenant defaulted on the lease since the lease agreement authorized the landlord to inspect the property on a default by the tenant.
