This month I will address three areas of real estate law which, judging from the volume of telephone calls I receive from AOA members, continue to generate a good amount of confusion. These fields are:
1. The maximum rent an owner or management company may charge a resident manager who is required to live in the apartment complex,
2. The difference between easements and adverse possession arising from an encroaching wall or fence, and
3. The general rules of law pertaining to trees.
Maximum Resident Manager Rent
Numerous readers have expressed anxiety about my advisory in the January 2012 publication of AOA Magazine regarding the maximum rent that they may charge to a resident manager.
Specifically, I advised readers that if the resident manager (or other responsible person) is required, as a condition of employment, to live in a unit at the apartment building, the maximum rent which the owner or management company may charge the manager for the unit is $451.89 if just one person is employed, and $668.46 if a couple is employed. That is a true statement of California law, and honestly folks, I did not make those numbers up.
The rent limitation is imposed by the California Industrial Welfare Commission in its Wage Order No. 5 2001, as amended. Specifically, Section 10(E) of the Order provides: If, as a condition of employment, the employee must live at the place of employment . . . then the employer may not charge rent in excess of the values listed herein
Section 10(C) lists those values as $451.89 and $668.46, respectively, depending on whether one or two persons are employed.
What the Wage Order means is that if the employer requires the manager to live in one of the apartment units, then the rent that the owner or management company may charge the manager is capped at those amounts.
The one exception to the I.W.C. rule is found in Labor Code Section 1182.8. That section allows the employer to charge up to two thirds the market rental value of the unit supplied to the manager, provided that no discounted credit from the higher rental value is used to meet the owner’s minimum wage obligation to the manager. In my January 2012 article, I denominated that exception as the check exchange exception.
Since California state law (25 C.C.R. §42) mandates that all apartment buildings consisting of 16 or more units have a resident manager or other responsible person reside on the premises, the rent limitations of $451.89 and $668.46 are applicable to all complexes exceeding 15 units, unless the check exchange exception is applicable.
Nevertheless, I do believe that there is a legal, but highly technical, way to avoid the rent limitations on a 16 or more unit building. However, it is not an opinion I am comfortable publishing because once it circulates in a public forum (as the articles in this magazine do), the Industrial Welfare Commission may revise its Wage Order to eliminate the potential loophole. I would be happy to individually advise California Apartment Owners Association members in private conversation of a perhaps possible way to avoid the limitations.
Tree Law
There are many legal rules governing trees in California. Here are six of the most important ones:
Rule No. 1: Trees with trunks standing wholly upon the land of one owner belong exclusively to him, even though their roots may grow into the land of a neighbor.
Rule No. 2: Trees with trunks standing partly on the land of each of two adjoining owners belong to both landowners.
Rule No. 3: Where the trunk of a tree is wholly located on the property of one owner, the adjoining landowner may not cut any portion of the tree which is not on his side of the boundary line.
Rule No. 4: A neighbor may ordinarily sever and remove those portions of a tree which overhang his property if the trunk of the tree is located wholly on the property of the adjoining owner. However, Rule No. 4 may be limited if the truncation of the overhanging limbs of the tree would seriously damage or otherwise kill the remainder of the tree. In that instance, the neighbor may be compelled to prove that the nuisance or damage caused to his property by the tree outweighs the value of the tree to the owner.
Rule No. 5: Where the trunk of a tree stands partly on the land of one owner and partly on the land of an adjoining owner, there is only a limited right to cut any portion of the tree.
Rule No. 6: Where an adjoining owner threatens to violate any of the foregoing rules, the other party has a right to ask the court for a restraining order enjoining the adjoining landowner from improperly cutting the trees.
In the context of tree law, what is important to bear in mind is that before cutting someone else’s overhanging or encroaching branches, be sure to weigh the nuisance effect on you and your land versus the damage it will cause the adjoining owner and his tree. Our courts typically apply a reasonableness test to the tree trimmer’s actions. If found to be unreasonable, the trimmer may be liable for substantial damages.
Easements/Adverse Possession
Encroaching walls, fences and other structures tend to be a constant problem between property owners. As I have explained to AOA readers over a course of many years, if you are aware of an encroachment or an unauthorized use of your property by a neighbor, prompt action should be taken in order to avoid an easement (i.e., a shared usage) or adverse possession (i.e., a change of title) from affecting your land. Such steps may include anything from as simple as requesting the neighbor to remove the encroachment to as serious as filing a lawsuit for a court order compelling the removal.
One illuminating case was litigated in a California Superior Court from 2008 to September 2011. There, the neighbor’s wall encroached on the owner’s land by approximately ten feet for about seven years following the neighbor’s purchase of their property in 2001.
Customarily, a court will not grant the encroaching party a prescriptive easement where the wall or other solid structure completely fences the true owner out of his own land. Thus, the judge in the Superior Court case did not grant the neighbor an easement because the owner was completely blocked from using his own land. Easements connote a shared use of property by the neighbor with the landowner, not exclusive use by the neighbor.
When the judge decided the case, he found that not only did the wall encroach for more than the statutory period of five years, but also that the neighbor had paid the property taxes on the encroached upon land for the seven years preceding the filing of his lawsuit.
The court then determined that the neighbor had acquired title, rather than an easement, to the ten foot strip by virtue of the fact that the encroachment was visible, continuous and hostile for more than five years, while at the same time the neighbor paid the real estate taxes. Such an acquisition of title is known as adverse possession.
The lesson to be learned from that case is for owners to pay careful attention to the location of their boundaries and any potential encroachments across them. If an owner has any doubt, he should engage a surveyor to prepare a map plotting the boundary and the footprint of any structures within three to five feet of either side of the boundary. If the survey reveals any encroachment, legal counsel should be promptly sought.
Dale Alberstone is a prominent litigation and transactional real estate attorney who has specialized in real property law for the past 36 years. He has been appointed to periodically serve as a judge pro tem of the Los Angeles Superior Court and is a former arbitrator for the American Arbitration Association. He also testifies as an expert witness for and against other attorneys who have been accused of legal malpractice.
Mr. Alberstone has been awarded an AV rating from Martindale-Hubbell, which is a registered certification of Reed Elsevier Properties, Inc. An AV rating reflects an attorney who has reached the heights of professional excellence and is recognized for the highest levels of skill and integrity. His firm is rated A+ by the Better Business Bureau.
The foregoing article was authored on March 1, 2012, and is intended as a general overview of the law and may not apply to the reader’s particular case. Readers are cautioned to consult an advisor of their own selection with respect to any particular situation.
Address correspondence to Dale S. Alberstone, Esq., ALBERSTONE & ALBERSTONE, 1801 Avenue of the Stars, Suite 600, Los Angeles, California 90067. Phone: (310) 277-7300.