Archive for category: Real Estate

            Real property (or real estate) has many features and characteristics.  Two of the features that exist in every parcel of real property are the surface rights, and the subsurface, or mineral rights.  The surface rights generally includes the rights to use the surface of the property, such as building on the property, or traveling over the property.  The subsurface rights, or the mineral rights, usually includes the right to remove, or extract, valuable minerals that may lie beneath the surface of the property. One person can own the surface rights, and a different can own the mineral rights. The right and ownership of mineral rights can be valuable.  And while the definition of “minerals” might seem obvious, the true meaning of “minerals” may not always be clear.

It seems that the operator of a rock quarry hired a company to extract and crush rock from the quarry.  The rock was extracted by using explosives, and then removing the broken rock from the surface of the ground. The removal of the rock caused the surface of the ground to be lowered.  The crushed rock was used for such things as road base and was also used in asphalt and concrete.

There was a lot of money at stake in this case.  The company that had extracted the rock claimed that it was owed over 1.5 million dollars plus interest for the work it had done.  The company filed suit for payment, and claimed that under it was entitled to a “mining” lien on the quarry because it’s work in removing the rock amounted to “surface mining.” California Civil Code section 3060 states, among other things, that any person who performs labor in any mining claim is entitled to a lien upon such mining claim.

The Court of Appeal gave careful consideration to the claims of both parties.  It quoted an 1885 California case which had found that Webster’s dictionary defines a mine as “a pit or excavation in the earth from which metallic ores or other mineral substances are taken by digging, distinguished from the pits from which stones only are taken, and which are called quarries.”   The Court of Appeal further discussed that a “mining claim” is that portion of a “vein” or “lode” to which a claimant has acquired a right of possession pursuant to the “laws of the United States and the local rules and customs of miners.”

The Court engaged in a lengthy examination of whether “gravel” is a “mineral” and found that in some instances gravel might actually be properly considered to be a mineral, but not under the facts of this particular case. The court noted that “mineral” is generally defined as having a “definite chemical composition by which it can be easily recognized.” The court found that “commercial gravel is simply a jumbled mass of fragments of various minerals.”  Because gravel usually consists of a mixture of materials instead of a specific substance, the court found that with respect to the alleged “mining claim” in this case, gravel was not a mineral and there was no “mining claim.”.   As a result, the company hired by the quarry operator had no right to a lien on the quarry.  However, there were other claims between the parties that are too lengthy to describe here.  The end result was that the court found for purposes of this case that the “gravel” that was removed was not a “mineral.” Since no “minerals” were removed, and since there was no “mining claim,” there was no right to a lien on any “mining claim.”  But the Court specifically noted that gravel might constitute a “mineral” in other situations.  The case is reported as Sukut Construction, Inc. v. Rimrock CA LLC (2011) DJDAR 14846.

Lien laws, mining laws, and laws concerning non-payment are complex, and as shown by this case, the legal answer in any given situation can be difficult to determine.  It’s not easy to determine what the law requires or provides in any given situation.  Persons with claims, questions, or issues concerning liens, payment or contractual relations should consult a qualified legal professional.

            The use of land has been around for so many year that it’s most people take our present system of land use for granted.  But unimproved land lacks many of the characteristics that we enjoy on a daily basis.  For example, when the pioneers first settled California, there was no readily developed system of access to real property.  The major roads into California would have been the emigrant trail and similar trails over the Sierra Nevadas.  And the Spanish Missionaries had developed the El Camino Real (or the “Royal Road” or “King’s Highway”) that stretched from San Diego in the south up to San Francisco in the north and beyond.

But when the settlers arrived, there was no readily developed system of streets and highways in place.  The settlers got to figure it out.  We can see the present effects of their work in the streets currently in place in downtown San Francisco, which have been in place now for a long, long time.

Use of real estate depends on access to it, and there can be different approaches on how to lay out streets and roads.  For example, when the Mormon pioneers entered the Salt Lake valley, all they found was a bunch of sagebrush and a lake that was too salty to drink.  A big group of pioneers arrived all at once, and one of the first things they had to do was lay out a brand new city and figure out the streets.  In comparison with most other metropolitan areas, the main streets of Salt Lake City today are exceptionally wide.  It’s reported that Brigham Young directed that the streets should be made sufficiently wide that a wagon pulled by a 20 mule team could make a U-turn without backing up.  Now that’s the voice of experience.

Most of us never even think twice about the streets and roads we drive on.  But there’s a lot going on behind the scenes with roads – or rather, below the scenes.  Utilities consisting of gas mains, sewer lines, electrical conduit and telecommunications lines exist below many urban streets.  California has a completely separate legislative code consisting of legislative statutes devoted entirely to streets and highways – it’s know as the “streets and highways code.”  This code has all kinds of things in it, and many of them are not well known.  For example, Section 1953 of the California Streets and Highways code provides that a city or county may pass an ordinance or resolution establishing a “Golf Cart Transportation Plan.”  Such a plan would be designed so that drivers of legal age could use golf carts for transportation on city streets.  The statutes state that the Golf Cart plan can’t include use of a state highway.  However, the statutes state that a separately marked lane for golf carts can be placed alongside a state highway, and golf cart crossings can be made across state highways.

The statutes provide that any plan allowing for golf cart transportation on city streets must include “Minimum design criteria for golf carts, that may include, but not be limited to, headlights, turn signals, safety devices, mirrors, brake lights, windshields, and other devices. The criteria may include requirements for seatbelts and a covered passenger compartment.”  Now that’s a golf cart!  Never seen a golf cart with mirrors, headlights, or turn signals.  But there’s no good reason why carts couldn’t include such things.  These golf cart statutes were passed in 1994, or nearly 20 years ago, but I still haven’t seen any golf carts like these on city streets.  So widespread use of golf carts for city driving may be something that is still yet to come.

Real estate can only be used if we can get to it.  And even though boats and ferries provide access to some real estate, most real estate is accessed through streets, roads, and highways.  Years ago I remember going out to the Delta with friends for a water-skiing trip.  We got to their property on a small island by using a boat.  When we arrived, we saw a parked helicopter on one of the other properties.  We learned that one of the neighbors used this helicopter for getting to and from his property out on the Delta.  But this is an exception.  Most of us get to and from our homes, cabins, and other real estate by street or by road.

There’s a separate legal code in California known as the “Streets and Highways” code.  This code contains many of the statutes which have been passed by the California Legislature over the years concerning the construction and maintenance of streets and highways and related improvements.  For example, the Streets and Highways code contains a Neighborhood Electric Vehicle plan sections concerning Riverside, Orange and Amador Counties.  This section contains provisions for setting up transportation arrangements for electric vehicles.  There’s also a section in the Streets and Highways code dealing with the “Street Lighting Act of 1919.”  Yes, street lighting was a concern in 1919, and it still is – though we usually don’t think about a street light unless it’s flickering or out. There’s a section in there about toll roads, bridges and ferries, and there’s an entire chapter at section 30910 about San Francisco Bridges.  Not the type of material that always makes headlines – but if it weren’t all organized and working effectively, we’d notice it.  These kinds of provisions go on in the background, usually unnoticed, and so long as they work well, we’re all benefitted.

The Streets and Highways code generally concerns the construction and maintenance of actual streets and highways and related improvements and uses such as lighting and parking.  There is a separate code known as the “vehicle” code that is focused more directly on motor vehicles and their use on streets and highways. There’s a recent legal case that highlights a current issue with respect to the use of motor vehicles on these streets and highways.

It seems there was a driver who was cited for violating Vehicle Code section 23123, which states in part that persons shall not drive on public roadways using a wireless telephone unless the phone is configured for hands-free listening and talking, and is used in that manner while driving.  According to the court’s opinion, this motorist was stopped at a red traffic light.  A motorcycle policeman pulled up on the driver-side of the car and saw the motorist sitting in the driver’s seat with a flip-type cell phone.  The motorist was apparently in the process of dialing the phone and placing it to his ear.  According to the court’s opinion, the motorist looked at the officer, removed the phone from his ear, and closed it.  After the light turned green, the officer pulled the motorist over and advised him that his use of the phone was in violation of the law. The motorist objected and stated that he only was using his phone while he was stopped at the light and while he wasn’t driving, but the officer cited him anyway.

At the hearing on the matter, the motorist argued that a car which is stopped at a traffic light is not being “driven” and that therefore the cell phone statute doesn’t apply to vehicles which are stopped.  However, the court found him in violation of the cell phone statute and fined him.  He appealed, and the court of appeal carefully considered, in a very lengthy opinion, whether or not a car stopped at a traffic light is nevertheless in the process of being driven.   The court noted that the motorist made a good point, but the court of appeal nevertheless upheld the judgment of the trial court.  In a concurring opinion, one of the appellate justices wrote: “Any mom or dad driving kids to school can expect to stop while parents in cars in front of them are unloading their kids.  A shopper driving to a store near Lake Merritt in Oakland may have to stop while a gaggle of geese crosses the street. A couple going for a Sunday drive in West Marin County may have to stop for a cattle crossing.  And, of course, all of us are expected to stop for red lights, stop signs, crossing trains, and funeral processions.  In short, all drivers may, and sometimes must, stop.  But they do so while “driving.”  Just like defendant.” The case is located at 2011 DJDAR 16531.

There you have it.

Driving rules and statutes are complex.  Results in any given case can vary.  Persons with questions about the nature, extent, or meaning of driving rules, statutes, or ordinances should consult legal counsel.

            Credit cards have virtually eclipsed the use of cash and checks for routine retail transactions.  Thirty or forty years ago, before credit cards were widely used, most transactions were done by cash or check.  These days, it seems like virtually all retail transactions are done by credit card except for the smallest retail purchases.

But in real estate transactions, the use of checks is still common.  Most sales of real estate involve a down payment, and the amount of the down payment is large enough that cash is seldom used.  Common practice is to use either a personal or cashier’s check for such a down payment, which is often for several thousand dollars or even for tens of thousands of dollars.

There can be situations where a person writing a check may want to “post-date” a check.  Such a person may need time to gather money from various sources.  Recognizing that a return of a check for insufficient funds can create a number of problems, such persons may offer to “post-date” the check to a later date and ask for an agreement that the check not be deposited until such later date.

This can lead to an interesting question as to what a Bank would do if such a check were deposited before the date shown on the check.  Most people probably don’t know whether a Bank can properly pay, deposit, or negotiate a post-dated check before the date shown on the check.

Two rules govern situations involving post dated checks.  The first rule provides that “negotiable instruments” such as checks are not properly payable until the date shown on the instrument. But a second rule provides an exception, and it states that a Bank may properly charge its customer’s account for a post-dated check before the date shown on the check.  These rules are found at California Commercial Code sections 3113 and 4401.  As a result, a person who receives a post-dated check can literally go straight down to their bank, deposit the check, and the Bank can properly honor that check.  (If the Bank has a different policy regarding post-dated checks, then the Bank may nevertheless refuse to honor the check even though the law provides it could be properly paid).

There’s one important exception.  If, before the check is deposited, the customer provides notice to the Bank that the check is post-dated, and if the Bank is given enough advance notice to act on this notice before the check is presented, then the Bank cannot properly honor the post- dated check before the date on the check.  If the customer tells the Bank about the post-dated check over the phone or verbally, then the Bank is supposed to wait 14 calendar days before it honors the post-dated check, unless the check’s date is within that 14 day period.  But if the customer follows up with a letter, then the customer’s instruction to not pay the post-dated check is valid for up to 6 months.

Sometimes bank errors occur, and checks get honored that shouldn’t be honored.  And there can be other exceptions and considerations involving post-dated checks.  As a result, if a person intends to write a post-dated check and if any significant amount of money is involved, such a person should consult an appropriate professional if the time of deposit is of any concern.