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Question and Answer Regarding Regarding Whether Mirrors Stay on Property Upon the Close of Escrow

Question:  Do mirrors in bathrooms remain at a property after the close of escrow by the sellers?

Answer:    It depends.  If the mirror is attached to the wall, it is a fixture and should be left at the property by the seller.  However, if the mirror is hanging, similar to a picture, the seller may generally remove the mirror.  Buyers are advised to consider this issue when writing offers and include mirrors that they intend to purchase as part of the property in the purchase and sale agreement.

 

-Shannon B. Jones, Partner, [email protected]

The Serving of Alcohol at Open Houses

The issue of serving alcoholic beverages at open houses raises numerous concerns for real estate agents and homeowners.   While this may seem like a good idea to entice members of the public and real estate agents to attend an open house, there are numerous factors to consider in this regard.  One must weigh the potential liability issues in determining whether to allow alcoholic beverages to be served during either a public or broker open house.

If there should be a claim made for personal injury or damage to property based upon the serving of alcohol beverages at an open house,  it is possible that there may not be insurance coverage to protect either the homeowner or the real estate agent holding the open house.  Since the serving of alcohol is not necessarily considered a professional service for a real estate agent, it is possible that a broker’s E & O Insurance may not provide coverage for any claim related to this.  In addition, there may well be an exclusion for any claim based upon someone leaving an open house and getting into an accident that might be based upon that person’s consumption of alcohol.  There is also no guarantee that a broker’s general liability policy will cover such a claim.  It is possible that the seller’s homeowner’s policy might cover such a claim but this should be checked out before serving alcohol at an open house, not after a claim if filed.

A license to serve alcoholic beverages is required at an open house which is open to the public, whether it is public open house or a brokers’ open house for real estate agents.    And a real estate license is not the license required for this.   It is strongly suggested that if a real estate agent decides to serve alcoholic beverages at an open house that this only be done by hiring a caterer who possesses an on-sale license from the California Department of Alcoholic Beverage and Control (the “ABC”) and has a type 58 catering permit also issued by the ABC.  In addition, the caterer/server should have liability insurance and should provide the agent and brokerage with a hold harmless and indemnification agreement with regard to anything related to the serving of alcohol at the open house.

It is critical that no minors be served alcohol and the catering service should be instructed to require identification from guests.  There should be a drink limit imposed for all guests.    And the catering service should be instructed not to serve anyone who is obviously intoxicated.   In addition, there should be a variety of alternate, non alcoholic beverages served.

There is a private party exception to the requirement of an ABC license to serve alcoholic beverages but this exception would NOT apply to either a broker open house or a public open house.  It would only apply to an event that is not open to the general public with a specific guest list.  Even with a private party, it is suggested that a caterer be hired for the event as stated above.

The general rule in California is that there is no Civil Liability to a person who sells, furnishes, or provides, any alcoholic beverage unless the alcohol is served to a minor or someone who is obviously intoxicated.

But whether there turns out ultimately to be Civil liability or not, real estate agents must weigh the risk of having a legal action filed against them and their real estate brokerage should someone get into an accident after consuming alcohol at the open house.    It may very well be a risk that does not outweigh the benefits of serving alcoholic beverages at public or broker open houses.

Real estate agents should not serve alcoholic beverages at open houses without first discussing this with their broker or office manager and obtaining their approval.  Before granting such approval, brokers and office managers are advised to check directly with their various insurance brokers and with their own real estate attorney.

 

-Spile, Leff & Goor, LLP

DO NOT CALL OFFICE GUIDELINES AND SUGGESTED OFFICE POLICY

Attached to this Memo is a suggested Office DO NOT CALL Policy published by CAR as well as a sample of the required Company Specific Do NOT Call List which each office should maintain. It is suggested that you personalize and then distribute this Company Do-Not-Call policy to all your agents and agents' assistants, if you do not already have a written Office Do Not Call Policy.

In a nutshell, agents and their assistants should not be making solicitation calls without first checking the Government Do-Not-Call List.

Please note that the use of auto dialers or robo calls is strictly prohibited with reference to cell phones whether or not the cell phone number is on the Do-Not-Call list.
These are serious issue as numerous lawsuits have been filed for violation of the Federal Do-Not- Call guidelines. Read more »

Court Permits CalBRE to Post an Agent’s Convictions, Even Though the Convictions Were Dismissed

In Skulason v. California Bureau of Real Estate, a California Appellate Court recently held that the California Bureau of Real Estate ("CalBRE") had no mandatory duty to remove from its website publicly available information about a real estate licensee's convictions, including convictions that were subsequently, dismissed.  In Skulason, licensee Brenda Skulason, sued CalBRE claiming that it had improperly refused to remove from its public website a document revealing that she had been previously convicted of three (3) misdemeanors.  She asserted that CalBRE was required to remove the document, because the convictions, while valid when entered, had subsequently been dismissed.  According to the agent, even though her prior convictions were not confidential, the disclosure of those convictions on the website imposed a penalty, because the Bureau was “going out of its way to disseminate the information” by “publishing the convictions to potential employers with full knowledge that the convictions were now expunged.”  The trial court agreed with Ms. Skulason and entered judgment in favor of Skulason.  The court of appeals reversed holding that CalBRE had no mandatory duty to remove the information from its website.  As the agent acknowledged, the information was publicly available.  The court found no authority establishing any duty that would restrict CalBRE's ability to post publically available information about a licensee on its website.  Skulason also failed to provide any authority for her position that the Bureau had a duty, even if it disclosed the convictions, to disclose that the convictions had been dismissed.

 

Shannon B. Jones, Partner [email protected]

Question and Answer Regarding Whether Emails Create a Binding Contract

Question:         Can emails create a binding contract?

Answer:           Recently, an appellate court in New York held that emails between a buyer and seller may constitute a formal binding contract.  In Stonehill Capital Management v. Bank of the West 28 NY3D 439, 2016, an appellate court upheld a contract entered into by parties when the seller "agreed" to accepted the option bidders bid in an email that set forth all the material terms of the deal, including the sales price, specific loan to be sold, timing of the closing and manner of payment and wire transfer information.  In that email, the seller had stated that its acceptance "was subject to mutual execution of an acceptable [loan sale agreement]," which was never executed.  Nevertheless, the New York appellate court found that by establishing these elements, the requirement of Statute of Frauds was met.

Currently, there are no cases in California where in a court issued a similar decision.  However, it is entirely likely that under similar circumstances, a California appellate court could find in a similar manner.

Parties are cautioned that when emailing terms of a contract, they do not establish their agreement to those terms.  Nevertheless, as a reminder, real estate agents, unless provided specific authority to do so, may not enter into contracts on behalf of their clients.  This is beyond the scope of the agency relationship.

-Shannon B. Jones, Partner, [email protected]

Buyer Early Occupancy Addendum

The California Real Estate Legal Alliance (“CRELA”) recently posted the attached article entitled, "Buyer Early Occupancy Addendum." CAR has just released a new form entitled "Buyer Early Occupancy Addendum".   Please see the attached article for important information regarding this form.

Short Sale Scam Uncovered in Southern California

The California Real Estate Legal Alliance (“CRELA”) recently posted the attached article entitled, "Short Sale Scam Uncovered in Southern California." It is important that agents be aware of these short sale scams.

C.A.R. Agent Commission Sharing Agreement

The California Real Estate Legal Alliance (“CRELA”) recently posted the attached article entitled, "C.A.R. Agent Commission Sharing Agreement" This is a new C.A.R. form that was released in December 2016. It is for usage by agents who are sharing clients and/or business and it is highly recommended  that this form be used in such circumstances.