Real Estate and Small Business Law, with Attorney Jack M. LaPedis

0:02 Longtime friend of the program, Jack LaPedis. Jack, I'm sorry, Jack M. LaPedis. And his first name is Jack legally, at least is on the calbar.org website. So many people name Jack named Jonathan. They go by Jack or they name something else. They go by Jack. John Kennedy famously, but at least the calbar.org really is Jack. We're going to talk about the importance of specific names. [unclear] Jack M. LaPedis. Jack, thanks for joining us today. Thanks for having me. Always a pleasure.

0:31 So really, you know, I'm kind of making fun of it, but the use of a middle name consistently or not can become important in estate planning documents and or real estate transactions, I would think.

0:42 Yeah, it can it shouldn't, but it can. And the reason why I say it shouldn't is because you can sign your name however you want. you can sign it. You know, I know someone who they when they sign their la their last name, it's the first initial and then just a scribble. And so [snorts] if that's how you sign your name, that's how you sign your name. Interestingly enough, I remember when I was st sign signing documents for financial aid in law school, they had a specific rule that they had to be able to read your signature, which I thought was interesting because

1:23 Not every signature can be read. So, if I'm writing a legible signature when I don't normally have a legible signature, is that my signature or is that me writing my name? So it comes up in that context and as we were discussing off the air the middle initial can be important. I always go by Jack M. LaPedis as you mentioned I had a grandfather who went by Jack LaPedis. Jack was not his legal name. It is my legal name. And because of some tax issues that my grandfather had at the time that he passed away, I've always used my middle initial because it's just to differentiate myself from my grandfather from someone who doesn't do if there's someone who decides to follow up on the tax issues and doesn't do their homework to figure out that my grandfather would be 120 years old today. so that's why the middle initial. I was the only kid in kindergarten who signed his name but the middle initial.

2:30 Wow. And it's important I think in I had a, as I mentioned, probate case where father and son had the same first name, same last name. One used his middle initial regularly, one didn't. And it was a deed between the two. The question was who was deeding to whom? Who was de who was deeding to whom, I think, is the right way to put it. And that was a legal issue. And both sides had arguments to make and it went to the judge and the judge made a decision and millions of dollars were transferred based on the decision whereas you know you could say maybe one side would say it was purposely made unclear the other side would say if you made it perfectly clear we wouldn't have had this issue. So that becomes important in estate planning documents I imagine when you leave docu when you leave you have errors you want to name the heirs properly. if you're the if you're the truster initially, you want to put your name properly, make sure people know that. So, that's just an interesting play on all that, I guess.

3:21 Well, you know, the first thing that pops into my mind when I think about deeds is that's one of the categories of documents that where you need a notarized signature

3:30 And the notary typically has a book where they write down not just the person's name, but they take their driver's license number and a fingerprint,

3:41 Right? and I've handled a number of cases involving notary fraud and [clears throat] notary negligence. So that doesn't always happen, but that that's the whole purpose of a notarization is to identify who's doing what,

3:56 Right? Theoretically, I mean, you know, it's only as good as the ID and the notary and you know, like you say, I've been involved with notary fraud cases as well. And so, that's just if they're going to steal somebody's property from your dollars, they'll probably also falsify the not documents. I mean,

4:12 If you're at it already. So, one of the things I want to talk about, and I find that you always have good insight on is the issue of partition and a partition action for those watching, and I talk about this more regularly now, and I have a new podcast I just launched called fractional interest to discover it more detail, but has to do with when you have two parties on a property. oftentimes, it's misthought that the majority owner, has more rights or can make the decision if they're going to sell or not sell. In reality, I believe, and you're the attorney, I believe that either party can force a sale under certain restrictions using a partition action in California. talk a little bit about if somebody is either an equal or a minority partner, you know, besides, you know, just being bullied into acceptance, what are their options and how hard is it to do a partition action?

5:02 Well, I let me go back even further. I have come up with this whatever you rule of thumb. If you're going to own property, real estate with somebody who is not your legal put a ring on it spouse, you need some sort of written agreement. and whether that's a direct written agreement like an operating agreement or a management agreement or the formulation of a LLC or corporation that has its own agreements that answers those questions. you know, it and people are like, "Oh, well, this is my best buddy from first grade and we've always been, you know, whatever." That's fine and good, but what happens if your buddy dies? Now you're in business with his wife that you never liked. and operating agreement or the corporate documents will say, "What happens if someone dies? What happens if someone wants to get out? what happens if someone loses their interest due to a judgment?" I mean there all those things a lawyer can help put together and you know you don't talk to a lawyer to tell you everything that can go right. it's it the lawyers look into all the things that could possibly go wrong and we'll cover that. So assuming we don't have that and you have people who own a piece of property who are not spouses and something happens with the relationship or whatever unless the deed says something different. Everyone has rights. a lot of things one of the main things a lot of people don't even realize is that if you are part owner of real estate you can live there rent free unless there's something in the deed or some agreement that says otherwise. So you get into a situation where two people own a house and one person lived there for 20 years rent free and the relationship is breaking

7:06 Up and the other person says okay well you owe me 20 years worth of rent. No, you don't. So, you know, it arguably someone who owns more of the property may be able to impose their will on someone else to some extent, but it's not absolute and it certainly isn't absolute when it comes to selling the property or keeping the property. So, if there's anyone who owns an interest in the property, generally speaking, they have a say in what happens. And if the relationship really breaks down, what you end up doing sometimes is you have a partition action. And a partition action is literally a lawsuit where one or more parties sues the other owners and says, "I want to sell the property and split the proceeds." period the end. So if you have a partition action and it goes all the way through trial, at the end of the trial, the judgment will be the property will be sold and this is how the money is going to be divided and there's not much more to it. so you have situations where these partition actions in my experience almost never go to trial. They're really just a way to force a settlement of some kind. And a lot of it comes down to math. if one party has been paying the electric bill the whole time, they're entitled to reimbursement for half of that. If it's them and one other person or however the however many people there are. if one party's been paying the mortgage or the interest, I mean, or the mortgage or the insurance or repairs, the gardener, anything like

9:09 That. there a partition action will involve accountants who will figure out who owes who what. if you own the property 50/50 with someone else, it's not as simple as saying, "Okay, you get 50% of the proceeds and I get 50% of the proceeds. Someone's been paying on that." And if they haven't been paying equally, someone's someone should end up with more money. Now, what typically happens is some sort of settlement and maybe there's a reason why someone doesn't get 100% of what they would otherwise be entitled to. you know and then you also have a situation where someone sues for partition really just to get bought out and the person the other party says well I don't want to sell the house I'll you know finance buying this person out and we'll come to a number and again you don't always end up with a 100% of what you would typically be entitled to if the case went to trial and you really figured out the numbers. So a partition action is really an action by one party to split up the property you know break it down into dollars and cents and resolve the partner or dissolve the partnership.

10:33 You're muted. Bill, you're muted. Oh no, that happened. I'm sorry. I was coughing for something. does the court have a process like probate where the court supervises the sale or does the court just order that it be sold and they appoint a real estate agent or do they both parties have to agree? What's the process for the property? So, I've seen cases where one brought, you know, an offer and they brought an appraisal and said we want to sell sold for 1.3 million and we're entitled to half or third and the other party has the right, I guess, to match that. what's the process look like if it does go to trial?

11:12 If it goes does go to trial and [snorts] a judgment is entered for the sale. the judge can order whatever they believe is reasonable. typically the parties will put forth what they want to happen. and may even propose you know who the real estate agent would be. so the thing to keep in mind though is the [snorts] the possibility of any civil matter going to trial is very small.

11:50 Correct. The likelihood of a partition action going to trial. And to be honest, I don't I've never had a partition action go to trial of one of my cases. And I don't know of any other lawyers that I know who have taken a partition action to trial, at least in, you know, in LA County. I'm sure they do. At some point in time, it, you know, you get parties that just aren't going to do it,

12:17 Right? aren't going to resolve it and so they have to go to trial. And, you know, I'm cognizant of the fact that most cases don't go to trial, but I prepare every case like it's going to go to trial. partition actions are probably the least likely to go to trial of the of all the kinds of cases that I handle. and I can say that with some certainty because I have a I was just in trial last the last two months of a case I was like there's no way this is going to trial. This is going to settle. This is going to resolve. But it went to trial. We were in trial for two and a half weeks.

12:53 Partition action like I mean if I have partition action it's going to go to trial. I'm I'm buying a lottery ticket.

13:01 Well, I think now my experience with this on the other end is that you never get the other party to agree based on a phone call or based on a strongly worded attorney letter that would always triggers the settlement. And I think you're right. I've not personally been involved in a petition. I've interviewed other attorneys who've done some, but you it seems to me it's one of those matters that you have to follow the petition to get the other side to take it seriously because then they have to turn around and hire an attorney which is writing a check for 10 $20,000 I imagine and start working on defending themselves. And short of that, my experience is the two parties aren't communicating. there's nothing that will get them to and I mean I've had two of these recently and even the letter from the attorney outlining what the code says and you're going to lose and you have to pay [snorts] the attorney's fees back because you know you didn't you know agreed to sell the property as required. It just seems that the only way gets triggered is the actual filing of an actual petition which is a real waste of money and time and effort. Is that is that your experience or are you have you been able to get people to recognize their limits via a phone call and or strongly worded attorney letter? [snorts]

14:20 You know, it's it I have a limited view of the world. Okay. By the time something comes and hits my desk, things have already gone wrong for the most part. By the time someone calls me about the situation, they've already tried to resolve the situation with the other side and the other side is just being whatever. so by the time I get it, you know, we're already down that track. Now, that being said, as with all my cases, when I if the litigation has not already been filed, the one of the first things I do is I write a letter and I specifically am excluding saying a strongly worded letter. I write a letter like you described that just the facts, you know, the property is worth this much. This is who is paying the mortgage. This is who was paying the insurance. here are some round numbers and basically please get back to me. Like that's my first letter is get back to me and let's see what we can do or have your lawyer call me. and then I usually if I don't hear anything I'll follow up with another letter and then we're you know if I'm if we can't resolve it after two letters and or if they not getting back to me then we have to file the partition action.

15:48 A lot of the partition cases that I've handled in the last eight years, I'd say about 80% of them were already in litigation by the time I got involved. and which I think is, you know, is unfortunate because it's, you're right, it's a big waste of time. It's a it's it sets artificial deadlines. the attorneys have to do certain things. whereas if you just look, if you're going to file a lawsuit, tell the other side you're going to file a lawsuit. You better go hire a lawyer. Let's have our lawyers talk before we actually file the documents,

16:25 Right? But that's logical thinking and that's, you know, lawyers don't make a ton of money that way. But, you know, that [snorts] that that's the way I like to try and handle things. I like to give people the opportunity to avoid litigation as much as possible. the legal status of two parties that own a property that aren't husband wife, aren't joint tenants. sometimes it's specified tenants in common. it was not specified. I think by law they're they're treated as though they're tenants in common,

17:00 Right? That's the default by default. And so as a real estate agent, we have forms for that. There's disclosures for tenants in common to disclose. Is there an agreement? there's not agreement. but it seems once you get to that point, you know, you now you've kind of set things up if you don't have somebody you have a relationship with, you're setting up [snorts] opportunities for conflict. But if somebody came to you and said, "Hey, I own this property with my cousin. Didn't mean to because his father passed away." [snorts] you know, do you put together a tenancy in common agreement? Is that something that you that you create as attorney and help avoid that problem down the road? Well, I that's definitely a situation where people can involuntarily become partners in a in a real estate piece of real estate. You know, siblings, cousins, that sort of thing. you know, another a big one is adult children with steparent. and that, you know, that has its own fun aspects to it. You can certainly

18:03 You can certainly when that happens, you can certainly then go and create an agreement as long as you're all in agreement,

18:12 Right? You can create an operating agreement that applies to this property. You can you know create an LLC and transfer the property to the LLC. I believe you could probably set up some sort set up a trust. I think I'm I'm stepping outside of my area of expertise a little bit, but you can yes you if you find yourself in that situation as long as the other parties are willing to do it as well. You can certainly enter into an agreement

18:45 And the agreement I'm sorry and the agreement will include the terms of dissolution meaning usually a wellcrafted agreement would say if one party wants to sell maybe they have is a right of first refusal or if one party wants to sell they get two or three appraisals and they calculate a number based on that or whatever the agreement they both agree are. But the goal would be to set up a process in that agreement so that when because inevitably one party's going to die or want to leave or want the money and that would be in the agreement. And so in estate planning sometimes properties are distributed but there's no such agreement that goes along with it, right? And so it would seem to me the first thing to do would be to say we better figure out how we're going to work on this together. Either we agree to sell it or we're going to keep it. we better have some sort of a, you know, document that covers while we have it and then when neither one of us want to get out of the deal, what does that look like? I had a recent case where u a partner died. He had two different partners, two different properties and you know the heir didn't want to be in real estate. He just wanted his money. did these are very complicated properties in both cases. They both had tenants in common agreements that both specified here's the process. You get an appraisal. They have to agree. they don't agree, you know, there's there's the process. So, again, is that something that someone would come to you and you would create? I imagine, hey, I have a friend and we just both inherit this property. you know, but we're concerned at some point everything's fine now, but at some point I may need to sell out or he may or we may have, you know, spouses. Can you put together a tenants in common agreement? Is that something that you're able to do?

20:22 Oh, I focus on disputes and litigation and not so much on what I would call transactional work, which is creating contracts or shepherding transactions. I certainly can review agreements you know on one side's behalf or the other. I have done that kind of work, but I wouldn't want to put myself out there and say that I want a bunch of people coming to me and creating these agreements. There are attorneys I know who focus on that area. As lawyers, we don't say we specialize unless we have there's a thing you can get through the state bar that says you're a such and such specialist.

21:00 And so there are attorneys I know who focus on that. They may actually have a specialization. but it wouldn't be something that I would encourage people to come to me for. Even though except for the fact that I could probably refer them to a lawyer who could help them. And I want to say this, knowing Jack for six years or so, he has a phenomenal rolodex. He's introduced me to some great attorneys on specific niche issues. Litigation, probate litigation was one. I'm trying to think, there was another one or two. Oh, eviction litigation, not the standard filing of the paperwork, but really it was like a war litigation. You introduces somebody. So, Jack really has a great role

21:43 Governmental agencies. I remember there was a attorney you need you were dealing with something having to do with the city and there's an attorney I know who used to do lobbying.

21:52 Yeah. So he's a he's really great resource based in the valley here in Los Angeles but does has a pretty robust network and I would say somebody who really works his rolodex to find out what the other referring entity does well. So he's referring to somebody really does well. I get asked all the time I need attorney. What do you need them for? Well I just need to talk to attorney. Yeah, you know, that's not going to help you know, and I think that really that's something that you've always played with me is really get down to what the issue is and try to find the right person. Another area,

22:21 Well, it's also it's also interesting something that sorry, but something comes up a lot, especially in Facebook groups, but I spend a lot of time in Facebook groups, is they say, I need a let's say I need a real estate lawyer.

22:34 Right. Right. And then they [snorts] they get referred to me, which is great. And I get on the phone with them and I said, 'You know, it they inherited a piece of property, blah.

22:46 And it turns out they don't actually need a real estate lawyer, they need a probate lawyer, right? or an estate planning lawyer, right?

22:54 Just because it has to do with real estate doesn't mean you need real estate. So I encourage people instead of saying I need a blah lawyer or even that I need a lawyer is because sometimes you don't need a lawyer to solve some problems.

23:07 Correct. what you what you want to do is say here's the problem I have and you describe the problem and the person who you're talking to whether it be Bill or myself or somebody else

23:19 Like oh you need a surveyor you need a real estate dispute attorney. You need a probate lawyer.

23:28 Correct. because you saying what you think you need is a lot of times you're wrong.

23:36 Well, it's like saying you need a certain type of surgery without knowing really what your disease is. And I think that right and that's something that and also what state and county if you're in a Facebook group disposal on that or any other network because the laws vary by state and the procedures vary by county. And so, there's a big difference between getting an attorney who does a good job on probate in LA County versus Orange because the ones who do LA County know the judges, they know the procedures, they know the clerks, they know the probate attorneys review the notes and there it's a whole different world in Orange County. Not to say you can't do both, but it's not the same. as many specializations or focuses in the law, I think, as there are in medical, you know, when you're thinking about the all the different kinds of doctors there are. Lawyers aren't just lawyers, just like doctors aren't just doctors. They have focuses.

24:27 I feel the same way as a real estate agent. You know, I can sell anything from time shares to the Golden Gate Bridge, but I don't do well with bridges. I don't do well with time shares, but I do certain things really well. And I try to stay in that lane. And I think for everybody, the more the other thing I've learned is the more narrow somebody's focus is, the more value they bring to their customers because they go deeper and that's really what the customer needs is the right deep solution, not just some off-the-shelf solution. One of the areas I know that you've helped people in and I got involved with one in is lot line disputes, property disputes. And so in estate planning and probate, you inherit a property and you know, it's not uncommon that the decedent kind of didn't pay attention to something for 5, 10, 15, 20 years and then you find out, well, there's a driveway, but the lot line goes halfway through the driveway or there's a fence and half of the fence is on your property and half is on the other property. So talk about kind of common real estate, and I know you get involved in those lot line disputes, and what are things that people can do to avoid those disputes becoming bigger than they should be otherwise? Well, the there's two situations I'm going to touch on. One is when you're acquiring the property for the first time, not inheriting it. And I know that, you know, you're mostly have to do with probate, but let me touch on outside the probate area. I believe that within the next decade, one of the, if not required, one of the recommended things that's going to be done for every purchase of real estate will be a survey. And not just a survey showing that the property is a square or whatever, but a survey that shows the property lines in relation to buildings, driveways, trees, and fences.

26:10 Current state like an overlay like a like a overlay of a picture from top on top of the survey. Exactly. Doesn't have to be color. I've seen beautiful color surveys, but they just something that tells you

26:23 Because my joke is in the on the west side, the fences are merely suggestions of where the property lines might be. Yeah. I have a number of cases on the west side on the west side regarding fences and driveways. There's a lot of shared driveways and there's a lot of property line adjacent driveways in the west side. So, you get the survey, then you know that what you're looking at is what it is. Okay? If you find the fence is not on the property line, you know, give or take a few inches. Or if you find that the building is right up against the property line or that the property line, like you said, is in the middle of your driveway. I've literally handled that case. That helps your purchase decision, right? You know, you don't want to buy litigation, right? So, and any the only thing worse than buying litigation is unknowingly buying litigation.

27:22 Correct? You know, you can make decisions with, you know, knowledge is power. And so, if you find that the property line's actually in the middle of the driveway, that's something now you got go back to the seller. Did you know about this? Is there an agreement? Is there have you ever had a is there any litigation regarding that? Is there a written easement that hasn't been recorded? I mean, there's all kinds of things.

27:44 And if you and if you find that the property line runs down the middle of the driveway and the seller had no idea, do you really want to buy that property? If you know, are you going to go to the trouble of talking to the neighbor or, you know, all those sort of things. So, that's that's something I think is really important when you're buying property is to know where the property line is and know where the physical objects are. You know, there's a huge tree,

28:11 Correct? in the back, right? I had a case that tree was owned by three different properties because it was right on where the three properties came together and you know, so that opens you up for the rest of your life that you're owning this property. You're sharing this tree and who's going to pay for it to be trimmed and if it falls, who you know, all these things. But at least if you know going in, you can make decisions. Now, when you're inheriting a property, you also want to know those things. But then you have the situation where the fence has been there for 30 years, right? Or the driveway has been there for 30 years or that building has been over the property line for by a foot for 30 years. That opens a whole different chapter of the legal books of something called a prescriptive easement. There's other kinds of easements, but it's sort of the umbrella term that I use as prescriptive easement. My trial that I just got out of, it's not quite done yet. I actually have a hearing tomorrow about it. is about a prescriptive easement. and something has been there for since at least 2006 and probably well earlier than that, maybe as far back as the 70s.

29:35 So, you want to know, I've inherited this property. Do I have any property line issues? And if I have these property line issues, what am I going to do about them? How long have they been there? And what's our relationship with the neighbors? And is this problem with the property line to our benefit or to our deficit,

29:56 Right? And what does title have to say about this? You know, if we go back to the, you know, that's a whole another thing because if you inherited maybe title insurance from the decedent doesn't apply to you and I'm I'm not an insurance person and people may be screaming at the screen right now saying, "You idiot, that of course it doesn't apply." I don't know. But those are questions you need to ask. But you don't know to ask those questions unless you get a survey and find out what's going on.

30:23 Well, and to your point though, for sure if you make a deed and don't get new title insurance, for sure you're not covered. I can say that as a real estate agent with experience [snorts] with title companies. I know the law, but I can tell you from a as a consumer of the of the service. And I can also say for sure if you make a deed and you buy title insurance, then it is insured by definition. You get a policy and it specifies what's included, what's not included. And that's why I feel like so often in probate and state there these deeds that are done and they're not done as part of a transaction. They're not part of a insured transaction and that just forces the issue down the road. And I think we're only getting more particular legally over time. So whatever issues you have are worse 10 20 years from now with technology. you can find these issues and debates and so I think it's really important when you do estate planning for example you want to think about you know yeah you could deed it from them the person into the estate plan but now you have no title insurance and you should think about that well if you're also going to refinance why you just do it all at once if you're going to do a reverse mortgage just do it all at once and now you have title insurance on that transfer and so these are things that if they don't they come back to Jack five years later as a paying customer rather than as a consult so on lot lines and then again I guess you know one of the solutions has been a property I dealt with we had a conflict or we had a we had an issue with a lot line we just disclosed it and sold the property as is. We disclosed it and said here's what we know. Here's a prelim do your own survey. Do whatever you want. we think there's a problem with this where this is there's a fence issue with the city where two parties were arguing over who's responsible for fixing it and the truth was pretty clear to me that they both did and the my party said well I've been trying to get this guy to pay up all this time I had an investor said I don't care I'll deal with it and they bought it as is so as long as you disclose it you can get out of those issues and pass it on and the flip side I think I don't know if do

32:25 You get involved with this if you have a easement or you have a agreement between parties. It was not common to record those things in the past, but today I think it's really important to get those things recorded. So there's a history public information is disclosed publicly. And then again, when a transaction happens, there's insurance covering that easement agreement or common use agreement, whatever it is, that's part of the package rather than just some straight thing. Have you is that something you've seen? Is that good practice to get those things recorded? every one of my cases that resolves with a written easement, the easement is going to be recorded that period at the end. There you go. That's not even an option to have, you know, a secret easement. It does it doesn't make any sense. It doesn't benefit anybody.

33:12 But one thing that you said a phrase and again I'm stepping out of the probate area for just a moment. Use the term as is and I hear that come up from attorneys who don't practice in real estate. Yes,

33:27 A lot or from developers and investors who don't understand the term as is as used in real estate documents in California doesn't mean the what you think it means and I'm not talking about you I'm talking about you know the general public it doesn't mean I whatever it is it's as is you still have disclosure measure requirements. You can't commit fraud. You can't hide things. You can't purposely keep yourself

34:04 Not knowing things that you should discover, that sort of thing. Asis means if there's a fence around the property, there'll be a fence around the property at closing. If there's if as is means if there's a stove in the kitchen, there'll be that stove will be in the kitchen. It means you can't materially change the property,

34:31 Right? It's not a waiver of warranty. it's not a waiver of any duty. now that is different if I'm selling you for example a watch. You know that it Look, here's the watch. I'm handing you the watch. I'm selling it to you as is. I'm I have disclosed to you everything I know about that watch.

34:57 Okay, that that's a little different than selling a house and the term as is because the transaction of selling a house takes more time than selling a watch, right?

35:09 Like you typically don't escrow a watch, right? And so you don't have as many moving parts. And so that as is sort of says okay you can't materially change the structure of the real estate while this transaction is going on. So what I saw when I came for the open house is what I'm going to get when escrow closes.

35:31 Right? That is a completely different animal from disclosing a leaky roof or bad electrical system or property line issue. That's as is doesn't waive that,

35:45 Right? But if you disclose it, say, "I don't know if it's on the right line or not. Here's the dispute. Here's the letters. Here's the history. Here's everything I know, right? And during escrow, you can inspect everything you want, but you're buying it as it is. Meaning, here's all my disclosure. Here's all the information.

36:01 You know, I don't want to tell you other than you're you're going to take it from there, whatever that is, whatever it is." Right. You and I think I've used this term with you or this phrase with you before. You can't be successfully sued for something you disclosed. Okay? So, if you disclose it, they really can't sue you for it,

36:22 Right? And I tell when I'm advising real estate professionals, you know, I give I give presentations and such, I tell them, if you're the listing agent and the seller comes to you and says, "Should I disclose?" You put your hand up and you say, "Yes." Yes. Yes. Yeah. If they thought enough to ask you if they should if it should be disclosed, just disclose it.

36:48 Yeah. Right. It if you don't disclose something that you discussed disclosing, that's going to come back to bite you. Especially as the real estate professional who does this day in and day out,

37:02 Right? Okay. You may sell 99 properties and not have a problem. And that 100th property where the seller came to you and you said, "Oh, no. We don't need to disclose that." Going to come back to bite you.

37:15 Yeah. Because why would you ever say not to disclose? It's because the buyer would back out if they knew that information. And so, we're not going to tell them that because we don't want them to back out. Well, that's that's I don't know the legal term. That's a problem, right? That's not good. you know I had a I had a client who didn't answer disclosures to the very end about whether the parent passed in the property or not.

37:39 One thing that's common is people nowadays whatever reasons want to pass in the family home with their families. They want to have a experience of some sort.

37:49 But oftentimes, excuse me, they're not pronounced in the property as having passed. At some point they call the ambulance. The ambulance takes the hospital and they'll put you know the place of death as the hospital and by definition they didn't pass in the house. You could say that. So how you disclose that? Well you can disclose whatever you should disclose whatever you know whatever all that means but it's good to have the death cert. It says date place of death hospital. It's good to have it, but that doesn't mean you shouldn't disclose that, you know, whatever process you went through, you know, the student lived in the house for the last three years and was under hospice and was I just feel it's one of those things that you don't want to get around it to have it come back and bite you in the rear end. That's to me, it's just not worth that work. And in the end, in this particular case, he didn't want to disclose because he was afraid the buyer would back out. And the buyer at the very end was pissed when we and I got it and I had I had to disclose it once he told me and I did disclose it once he told me. I've learned now ever since to get the death cert day one. So I don't have to ask the question. I can just read it for myself and post it as appropriate. So again, it's one of those things where would you disclose if somebody did a hospice but they were picked up in the hospital and pronounced at the hospital not at the at the house? How would you do course?

39:09 Is this your area of expertise that you feel comfortable commenting? Well, you know, it's interesting as you're saying it, I'm thinking to myself, self the they didn't die in the house. Now, what I would do in this situ in that situation if a seller or [snorts] an agent came to me and asked, should I disclose? The default is yes. But I then I'd go and research it and I'd look at the, you know, the actual wording of the law,

39:37 Right? Because that's a that's a legal [snorts] requirement. this you were let me let me so I would look at the law and see what the law says and make a decision that way. but let me a different situation is when my wife and I lived in our old house whenever it rained there was a part of the driveway that would flood and it was just it was just a low point and there really was not much you can do about it. So we had a sump pump put in. And we had a big drain, probably 4t x 4t grid and a sump pump down in a hole and they dug a ditch all the way to the street and it never flooded again when it rained. Okay. And when we went to sell the house, I disclosed that the reason why we put in that that we put in that sump pump on this year and the reason we put it in is because it previously flooded bit and I was comfortable with that that little different than someone died in the house versus someone left the house and then died in the hospital. But you know it's a legal requirement, right? But it was just like it was something that I was like when you walk on this driveway you're going to see this big grid on the ground and it's like okay what's this about? And I just I thought I'll disclose it. I can't imagine that someone would not want to buy our house just because there used to be a flooding problem but I didn't want to have to deal with it that we didn't disclose we used to get floods in that area and it never went into the house. It was out in the driveway, but it was just, you know, now I had another situation. I handled a case where the kitchen sink had a plumbing issue and it caused a flood of water underneath the sink that the father-in-law came over and cleaned it up and he was a plumber or handyman and he fixed it and it wasn't an issue.

41:36 They, you know, dabbed up all the water, whatever. Five years later, they sell the house. Turns out the family they sent it sold it to one of the children had respiratory issues and at some point they figured out that there was this flood under the sink and the whole lawsuit was about this undisclosed flood

41:57 Right under the sink that took place five years earlier right so fast forward to my wife and I buying the house that we're in now we did a lot of work on it before we moved in so no one was living here for three months And one of our bathrooms has hardwood floors. And we moved in and the first time we used the toilet, it overflowed because the pipes had dried up. And so we had this flood in the bathroom that it really didn't require anything other than dabbing up the water and the hardwood floors survived fine. That's 18 years ago, and I still remember it. And if we ever go to sell this house, I'm going to disclose it just because it's something that someone has sued about an old flood and it sounds ridiculous until you get sued for it.

42:48 Well, that's why I recommend to sellers, the best practice is disclose it, put on your forms. As soon as you list the property, put the forms on the MLS. When they make offers, send them disclosures. when you're in escrow, open them right away some disclosures. Get out to them right away, as early as you can. my experience is people are not as careful. I'm not saying you're hiding it. I'm not saying you're doing anything dishonest. I'm saying do your job properly, early prepare. And that's the best protection of your customers. You know, disclose it, but get it up early. When you when the last piece of paper is whatever you're trying to whatever you think you might want to hide, that's when they're going to look at it really carefully. And if they have an excuse to get out, you've now given them an excuse to get out. And that's what you don't want.

43:34 Look, Jack, obviously, we can go on. I'm sorry I've kept you a little bit over time of Oh, okay. Sorry. What we plan to. So, I was just going to say, you know, if you're a real estate professional and you're selling a house that's in an HOA, you should get the meeting minutes and the CC&Rs and the bylaws before you even put on the MLS. You should already have those in your pocket.

43:54 Yes. Yeah. And nowadays, it's so much easier than it used to be. You know, now with the internet, usually you just go online, you pay a couple hundred bucks and you download it, upload to the MLS, and they're all there and tell people with an offer. You want them to acknowledge they reviewed it because they'll come back and say, "Oh, I didn't know I could have a dog over five pounds, you know, is in the is in the rules. It was right there." So, yeah. Again, I think I think what your good advice here is, let's disclose everything as we can and do it as early as we can in the process.

44:22 Fantastic. Well, somehow we managed to avoid talking about you football, which is a po point of contention with us. Jack LaPedis is one of the best attorneys in Los Angeles because of his rolodex. He's a he understands real estate agents, real estate investors and other attorneys. And so if you're an attorney doing estate planning and have real estate issues or you're a real estate agent, great guy to call. the litisaw.com is a website, litus law. And then down below we have his contact info and reach out to him. and then do you still go to that Wednesday real estate investment meeting?

44:53 I was just there today. How about it? How many people are there today at the Sizzler? today it was about 10 people. Okay. it's been as many as you know it's been as many as 40 people, but

45:06 A couple of the people who are running the meeting have some pretty good plans on how to advertise it more. So it should it should grow in the next few months. I believe

45:16 Prosperity Through Real Estate is every Wednesday at 11 at the Sizzler on [unclear] and Venice Boulevard with Venise Boulevard. great meeting and Jack was a regular there. That's where I met him through that group originally. So J, thank you as always for educating, being available, being a great resource and thanks for your time today at the podcast. I really appreciate it.

45:34 Oh, it's always great to talk with you, Bill. Hope to see you again real soon. Thanks. And of course, you always catch Jack on Facebook at some football or basketball game, just in case you're wondering where he is, if not the Dodgers. Hey, this is Bill Gross, [The Estate Planning Podcast]. We usually have estate planning attorneys, but Jack's a great resource when it comes to real estate and challenges in that area. So hopefully you got something out of that. If I can help in any way, please reach out at Bill Gross Probate on social media. And as always, make today your best day ever. Thanks so much.