Our client owns two pieces of real property in San Francisco, one single family home and one 10 unit apartment building. The owner had been planning to sell those properties for several years because she was looking to retire from the rentals business and wanted to take advantage of record high housing prices in the Bay area.
Unfortunately, around the date she listed the property, a quiet title action was filed a against her properties. The Lawsuit placed a lien on these two properties call a Lis Pendens. A Lis Penens is a notice that informs prospective purchasers that a legal action has been filed to determine who the true property owner is. This notice informs the public that the record owner may not be the legal owner of the property. Lis pendens dissuade buyers because the seller may not hold the legal right to sell the property.
The lawsuit alleged that those properties where actually owned by our client’s close Business Associate. The plaintiff had a judgment against the Business Associate for $150,000.00. Our client informed us the business associate had no assets and the Plaintiff was hoping to satisfy his judgment by clamining the Business Associate was the true owner of our clients Properties.
While the Business Associate was not the record owner of the properties, she had been directly involved in managing and leasing units in these properties. Our client lived abroad, and she relied on the Business Associates to manage and maintain the Properties. The Plaintiff alleged that the Business associate was the real owner of the properties and that Our client was acting as a “Straw Person” for the business associate. The business associate had previously owned one of the properties and her ex husband and siblings had previous owned the other one. Therefore, Plainitf sought a trial to determine if our client was the true owner or a “Staw Person” for the Business associate.
How Bassin Law was able to help.
The plaintiff’s complaint alleged that the business associate had created a complex network of “Straw People” who had been trading the property between themselves for the last 20 years. According to the plaintiff the business associate did this to hide her assets from potential creditors. The Business associate had a colorful reputation in the City of San Francsico because they had been involved in a high-profile scandal 30 years ago.
Fortunately for our client the Real Estate Lawyers at Bassin law devised a clever strategy. When a lis pendens is filed, the property owner can file a motion to “expunge” or remove the Lis pendens. This would force the Plaintiff to prove that their claim had merit before a judge in order to maintain their lis pendens. If the plaintiff could not prove their claim had some measure of validity, then the judge was required to expunge the Lis pendens under California law.
Our Real estate Lawyers determined that the plaintiff had a greater chance of supporting Their claim against one of the properties, because the business associate had owned it 30 years ago. So our Real estate Lawyers decided to file a motion to expunge against the property which the business associate had never directly owned. While, Plaintiff made an effort to prove the validity of their claim. judge ruled in favor of our client because plaintiff failed to prove any probability that the business associate was the true owner.
Following the judges ruling, Our real estate lawyers suggested mediation between the parties. However, the parties could not come to an agreement and settlement negotiations stalled. Our real estate lawyers then filed a second motion to expunge Lis pendens because we believed the plaintiffs claims where without merit.
Plaintiff then agreed to settle for a small amount and dismiss the quiet title action. Our client was then free to sell her properties. Our client went on to receive several above market offers for her properties