The DirtLaw Blog

The Partial Reconveyance

Often in a construction context, the Deed of Partial Reconveyance is required.  The most common scenario is when an owner wants to subdivide their parcel and the parcel is encumbered by a Deed of Trust.

The second most common scenario is when a neighbor wants to buy some additional portion of the adjacent property, usually to comply with setback requirements of their remodel or to preserve their view.

In both circumstances, the Lender made a loan against the entire property.  For ease of reference, assume Lender's Deed of Trust encumbers all of Property A, which totals 1 acre.

California is a Trust Deed state, which means there are 3 parties involved in the loan-- the lender is the Beneficiary, the borrower is the Trustor and the lender designates a Trustee (usually a title company).  The beneficiary has the power to tell the Trustee to reconvey title to the property back to the Trustor (borrower) if the loan is paid off.

However, when Owner A wants to sell 1/2 an acre to Owner B, the lender has to approve it and agree to instruct the Trustee to issue the Partial Reconveyance of the original Trust Deed.

The Lender will want an appraisal because it wants to make sure that if Owner A is shrinking the land (security or collateral for the loan) that the Trust Deed encumbers, that the borrower (Trustor) still meets the Lender's underwriting guidelines for the loan.   

The appraisal report will need to show the value before and after the proposed sale of the land to the neighbor.  If Owner A has owned the acre for a while, she or he may have experienced an increase in value and accordingly, even with the loss of the square footage, the value of the 1/2 acre may still be enough to meet the loan-to-value ratio the Lender requires.

After the Lender reassures themselves (with appraisal reports) that they are still adequately secured, they will instruct the Trustee to execute the partial release.  The Trustee is sometimes a title company and so they can usually prepare the Partial reconveyance in house.

In additional to the hurdles with the bank, the City or County will need to be involved for a lot line adjustment.

While the lender’s decision is not related to city or county approval, the city approval gives the appraiser a firm idea of what the boundaries are, square footage etc. on which to base his or her appraisal. 

Additionally, a civil engineer or surveyor will need to be involved in order to confirm those findings and describe the newly changed property boundaries.

In sum, it is not a particularly easy process to navigate as it requires the coordination of so many parties.  However, working with seasoned professionals will speed up this process.

Landlord Not Liable for Tenant's Dangerous Dog

There are a surprising number of cases involving dogs, though most cases are not as famous as the vicious attack that killed Diane Whipple in 2001.  Ms. Whipple's neighbors housed Canary Island mastiffs.  Both criminal and civil cases were highly televised.

In Alameda county, in the case of Chee v. Amanda Goldt Property Management, a Jack Russel Terrier attacked a 71 year old woman and only the legal journals picked it up.  In that case, the victim Ms. Chee sued her neighbor Kiymaz who owned the terrier.  Unfortunately, the neighbor filed for bankruptcy.  Left without a defendant, Ms. Chee's attorney brought an action against the landlord and the property management company under the theory of vicarious liability.

The Court found that the landlord and the property management company were not liable because they did not have actual knowledge of the that particular dog's dangerous characteristics.  Knowledge of the existence of the dog and the breed characteristics were not enough.

Additionally, the Court was careful to distinguish that this was taking place in a residential setting where pets are common.  The one case where a landlord has been found jointly and severally liable with the tenant was in a commercial property setting where the tenant kept a guard dog.  In that case (Portillo v. Aissa), the landlord had recently renewed a lease with the tenant and should have inspected the premises at the time of the lease renewal. 

The Chee Court reiterated that the general rule is that a residential landlord has no duty to check on the tenant and inspect for dangerous pets.  However, it would not be advisable to deliberately avoid managing your rental properties as there are other conditions to the property that a landlord would be responsible to inspect for and address.

Do you have a dog?  Talk to your insurance agent to see if your policy covers it. 

Good Fences Make Good Neighbors

Who has to pay?

Most of us share at least one fence with a neighbor.  In my case, I have a fence shared with 3 different neighbors.  Over time, the fences had weathered El Nino, and La Nina and pretty much gave way.  We shared the replacement cost with each neighbor equally.  Sounds like common sense, right?  Well actually, it's required by statute.

California Civil Code Section 841 states, "Coterminous owners are mutually bound equally to maintain...boundaries and monuments between them...[and] fences between them..."

That means that if your fence blows down in the next rain storm and your neighbor won't share the cost of replacement, you can remind them of their legal obligations.  However, there is one exception to the rule. 

Suppose the character of the neighborhood is such that your neighbor decides that he does not care whether the fence is ever replaced.  Then your neighbor is excused from paying for the fence.  This is a rare scenario, but in suburbs and metropolitan areas, people generally don't worry too much about wandering sheep, horses and other grazing animals.  However, those of us with dogs and/or children would normally prefer to fence off our yard.

Spite Fences

Most cities have regulations about the height of fencing, normally 6 feet tall is the maximum.  The state law (California Civil Code Section 841.4) is that anything exceeding 10 feet in height is a nuisance.

However, that code section actually requires intent, that the fence was erected either maliciously or maintained for the purpose annoying the neighbor.

Case law has gone on to find that even trees planted in such a manner can be considered a spite fence. 

The remedies for injured neighbor can be an injunction, reduction of the height or removal of the fence.