02.20.10
Posted in Litigation, Real Estate Law at 09:31 by Administrator
The California Court of Appeal, in Kuish v. Smith (2010 WL 373225), recently held as unenforceable a term in a contract for the purchase of real property which provided for a “nonrefundable” escrow deposit.
Kuish involved a $620,000 escrow deposit for the purchase of a $14 million oceanfront home in Laguna Beach. Instead of using a liquidated damages provision, the buyer and sellers merely agreed that the deposit would be “nonrefundable”. According to the trial court, both parties were sophisticated business people who understood the ramifications of their negotiation of non-refundable deposit.
The buyer eventually cancelled the agreement and the sellers refused to refund the buyer’s deposit, even though the property ultimately was sold to a third party for $1 million more than the contract price the buyer and sellers in Kuish had negotiated.
The buyer in Kuish sued to recover the $620,000 deposit. Ruling in favor of the buyer, the appellate court stated that “any provision by which money or property would be forfeited without regard to actual damage suffered would be an unenforceable penalty. To construe the term ‘nonrefundable’ to establish [the sellers’] entitlement to the full deposit without regard to actual damages would essentially create a liquidated damages provision.” However, the parties in Kuish did not separately sign or initial a liquidated damages provision.
California real estate brokers and salespersons commonly prepare various standardized real estate purchase contracts, at the direction of their principals. Most real estate brokers and salespersons, however, are not licensed to practice law and thus should not engage in activities which constitute the practice of law. The unauthorized practice of law, a violation of Business & Professions Code § 6125, generally includes giving “legal advice and counsel and preparation of legal instruments and contracts whereby legal rights are secured, regardless of whether such matters are depending in court.” Agran v. Shapiro, 127 C.A.2d Supp. 807 (1954).
An authoritative encyclopedia of California law, California Jurisprudence, states that, “. . . an established business custom sanctions the activities of real estate and insurance agents in drawing certain agreements in business transactions in which they take part in their respective professional capacities.” The editors then quote an article by Robert L. Lancefield which stated: “While these actions are technically within the usual definition of practice of law, they are generally recognized as proper where: [1] the instrument is simple or standardized; [2] the draftsman or intermediary does not charge any fee for such work (other than his regular commission for the transaction); and [3] the drafting is incidental to his other activities in the transaction.” 29 California Law Review 602. Nevertheless, “[s]election and use of a form by the broker may sometimes require a lawyer’s help.” Reference Book: A Real Estate Guide, 222-223 (State of California, Department of Real Estate, 2000).
Although it is unclear from the court’s opinion in Kuish whether either or both of the parties in that case were represented by real estate brokers, one might wonder whether they would have regarded advice from real estate brokers concerning whether to initial a $620,000 liquidated damages clause in a standardized purchase contract to have been “incidental to [a real estate broker’s] other activities in the transaction” or, on the other hand, whether they might regard such advice to have constituted the unauthorized practice of law.
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02.11.10
Posted in Litigation at 09:02 by Administrator
You may have seen the recent notice that the third Wednesday of each month will continue to be a California court closure day, at least through June. If you missed it, you can follow this link to the notice: http://www.courtinfo.ca.gov/presscenter/newsreleases/NR02-10.PDF. As you also may know, court closure days are treated as holidays by California courts, so Wednesday court filing deadlines automatically move to Thursday.
Earle Law Offices would like to remind you that we remain open on court closure days (the next one is Weds., Feb. 17th).
Also, we would like to remind you that tomorrow Friday, February 12th, is Lincoln’s Birthday. Courts are closed; WE ARE OPEN.
Remember, just because court closure days or holidays are creating a backlog in the courts, that doesn’t mean work on your legal matter cannot proceed so that when the courts are open, your case will be ready to receive the appropriate judicial attention.
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Special Offer
Representation by an attorney is included in the fee for every federal and California state tax return prepared by Earle Law Offices (subject to certain conditions, limitations, and restrictions). Attorney representation of taxpayer clients includes representation at audit, administrative appeal, and in civil litigation.
Tax controversy services are also available in cases where the disputed return was prepared by the taxpayer or a third party.
Further information on tax preparation and tax controversy services offered by Earle Law Offices is available at: www.EarleLaw.com/tax.
Please call Earle Law Offices today to schedule an appointment to have your 2009 tax returns prepared.
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02.06.10
Posted in Taxation Law at 08:36 by Administrator
Taxpayers who need their past tax return information can obtain it from the IRS. Here are eight things to know if you need copies of your federal tax return information.
1. There are two easy and convenient options for obtaining free copies of your federal tax return information – tax return transcripts and tax account transcripts.
2. The IRS does not charge a fee for transcripts, which are available for the current year as well as the past three years.
3. A tax return transcript shows most line items from your tax return as it was originally filed, including any accompanying forms and schedules. It does not reflect any changes you, your representative or the IRS made after the return was filed. In many cases, a return transcript will meet the requirements of lending institutions, such as those offering mortgages and student loans.
4. A tax account transcript shows any later adjustments either you or the IRS made after the tax return was filed. This transcript shows basic data – including marital status, type of return filed, adjusted gross income and taxable income.
5. To request either transcript by phone, call 800-829-1040 and follow the prompts in the recorded message.
6. To request a tax return transcript through the mail, individual taxpayers should complete IRS Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript. Form 4506T-EZ is only for individuals who filed a Form 1040 series return. Businesses, partnerships and individuals who need transcript information from other forms or need a tax account transcript must use the Form 4506T, Request for Transcript of Tax Return.
7. You should receive your tax return transcript within 10 working days from the time the IRS receives your request. Allow 30 calendar days for delivery of a tax account transcript.
8. If you still need an actual copy of a previously processed tax return, it will cost $57 per tax year and take much longer. Complete Form 4506, Request for Copy of Tax Form, and mail it to the IRS address listed on the form for your area. Please allow 60 days for actual copies of your return. Copies are generally available for the current year as well as the past six years.
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Special Offer
Representation by an attorney is included in the fee for every federal and California state tax return prepared by Earle Law Offices (subject to certain conditions, limitations, and restrictions). Attorney representation of taxpayer clients includes representation at audit, administrative appeal, and in civil litigation.
Tax controversy services are also available in cases where the disputed return was prepared by the taxpayer or a third party.
Further information on tax preparation and tax controversy services offered by Earle Law Offices is available at: www.EarleLaw.com/tax.
Please call Earle Law Offices today to schedule an appointment to have your 2009 tax returns prepared.
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