Property Grunt

Monday, January 03, 2005

Law and Government in Real Estate

This is a fascinating article on how powerful a role the court plays
in real estate.

City Obtains Court Order To Close Apartment Complex Authorities Say Apartment Used By Crips Set

In what was described as the first case of its kind, the city obtained a court order closing a South Los Angeles apartment complex used for decades by a Crips set, the City Attorney's Office said Tuesday.

"This is not something that the City Attorney's Office normally does," City Attorney Rocky Delgadillo said in the 6900 block of South Main Street. "But these are not normal circumstances."

The order closes a 24-unit complex across from Bethune Middle School that authorities say was used as a base for more than 20 years by the 69 East Coast Crips. At times, Delgadillo said, children at Bethune have been taken out of classrooms and herded into the cafeteria until police can secure the campus perimeter.

The order by Superior Court Judge Susan Bryant-Deason requires that the apartments be closed for at least 90 days, after which the property's owners will only be able to use the structure for commercial purposes, and with court approval, according to the City Attorney's Office.

Are judges that powerful? Let me put it this way: If a group of judges can decide who can be President of the United States, then they sure as hell can shut down a building.

Although this is the first I have ever heard of this occurring, this is an example of the power the court wields.

Let's take this further. You are a buyer and you have been given a sweet heart deal for this complex. All you've seen were the numbers and dollar signs of how much you will make. Everyone assures you it’s a great deal and you forego doing your own due diligence and buy it.

Now what do you think your position will be after the court order? Do you think the judge will understand that you were ignorant of the situation? That you have a mortgage to pay? Do you think the bank will sympathize with you and will understand why you are unable to make your payments? Do you think the building staff will take a pay freeze for 3 months?
I don't think so.

Another legal power that the government has is imminent domain.

Which means

The government (local, state or federal) has the power of "imminent domain," which is the legal and planning term for condemning property "for a public purpose." Usually this power is used for acquiring right-of-way in the case of the highway department, redevelopment in the case of urban renewal projects, sites for public facilities, etc."

If you own a piece of property that the government needs, they will take it away from you. Of course they will pay you but don't expect any leverage in the negotiation.

Hey, let's be careful out there.

-Sergeant Phil Esterhaus Hill Street Blues