Fountaingrove Executive Center | 3562 Round Barn Circle, Suite 212, Santa Rosa, CA 95403 | Phone: (707) 570-2200 • (510) 832-2900 | Fax: (510) 832-2945

Industry News

Minimum Wage

The minimum wage requirements in California have changed for 2019. Minimum wage for employers with 25 employees or less goes from $10.50 per hour in 2018 to $11.00 per hour in 2019. Minimum wage for employers with 26 or more employees goes from $11.00 per hour in 2018 to $12.00 per hour in 2019. This change also affects the minimum salary employees exempt from overtime requirements must be paid. The minimum exempt annual salary increases to $49,920 in 2019 for employers with more than 26 employees and increase to $45,760 in 2019 for employers with 25 or less employees.  Keep in mind that some California cities have higher minimum wage requirements.

Confidentiality in Settlement Agreements

A number of laws were added regarding the enforceability of contracts that prevent a party f...

As the calendar changes, employers need to be aware of the changes to California law going into effect this year. Here is an important one:

Effective January 1, 2019, all employers with 5 or more employees must provide at least 2 hours of sexual harassment prevention training to all supervisors and at least one hour of training to non-supervisory employees by January 1, 2020. This training must be provided within 6 months of the assumption of the position. After January 1, 2020, this training must be provided every 2 years. The law and regulations regarding this required training establishes guidelines and standards of what the training needs to include and how records that the training took place are to be maintained.

This is an important new requirement for many California employers becaus...

Starting last Friday and over the weekend, Lehman filed 65 new lawsuits against loan originators for loans sold or brokered to it and packaged as residential mortgage backed securities. In re Lehman Brothers Holdings, Inc., U.S. Bankruptcy Court, Southern District of New York, Case No. 08-13555. Per Lehman, many of the newly named parties either did not sell loans to Lehman that it felt were worth suing over related to the Fannie Mae settlement or settled with the parties on those loans before the Fannie Mae lawsuits were filed.  For most of the new lawsuits, the claims involve many more loans than were part of the Fannie Mae lawsuits and Lehman is claiming much more in damages.  The Court has indicated that it will not be managing these new cases alongside the existing cases. But, that se...

While there has been no official announcement, as of July 9, 2018, the Commissioner of the (now) California Department of Real Estate is no longer Wayne Bell.  The new acting Commissioner will be the Chief Deputy Commissioner, Daniel Sandri. There is conjecture that this leadership change at the Department of Real Estate is in some way connected to the reorganization of the agency from the Bureau of Real Estate, a bureau within the California Department of Consumer Affairs, back to the California Department of Real Estate, an independent agency.  But until the Department of Real Estate offers additional information or clarity, there are more questions than answers as to what this change may mean for real estate licensees operating in the State of California.  We might just add that enforce...

The Southern District of NY recently ruled on a case brought by the NY Attorney General and the CFPB against entities that make loans to plaintiffs based on the expected payout on settlements and judgments. Consumer Fin. Prot. Bureau v. RD Legal Funding, LLC, No. 17-CV-890 (LAP), 2018 WL 3094916 (S.D.N.Y. June 21, 2018).  This case is notable because it finds that the CFPB, as structured, is an unconstitutional agency and the court refused to fix the problem, as the DC Circuit did in in PHH Corp. v. CFPB, 881 F.3d 75 (D.C. Cir. 2018). The action is based on the Unfair and Deceptive Acts And Practices (UDAAP) and similar NY unfair business practice laws. The facts of the lawsuit are related to loans made to a class of NFL concussion victims and 9/11 victims.  The ruling was related to a pre...

In a recent decision, the California Supreme Court made an important ruling regarding the classification of workers as employees vs. independent contractors. In Dynamex Operations West, Inc. v. Superior Court of Los Angeles County (Lee), 4 Cal. 5th 903 (2018), the Court endorsed the “ABC” test in analyzing whether delivery drivers could pursue a class action against Dynamex for wage claims when Dynamex classified the drivers as independent contractors. 

The ”ABC” test endorsed by the Court requires looking at three factors: A) Is the worker free from the control and direction of the hiring entity in the performance of work? B) Does the worker perform work that is outside the usual course of the hiring entity’s business? C) And, is the worker customarily engaged in an independently establish...

There was a significant development in the Lehman bankruptcy on Thursday, March 8, 2018. After years of wrangling between Lehman and the RMBS holders, the Court set the value of the RMBS claims at $2.38 billion - down from the $37 billion initially demanded. If history is any predictor of future events, we can expect Lehman to take the same approach it took against originators after the 2014 GSE settlements; meaning, that originators throughout the country are likely to soon receive demand letters for payment based on alleged rep and warranty breaches. Regrettably, originators may soon be facing a new slew of litigation over very old loans.

BRE licensees are restricted in the way they can be paid and can contract for payment for their services. Many licensees know this as a restriction on advance fees. For example, this restricts a licensee from accepting a payment to list and sell a property before the property is sold. That is why licensees receive a commission for the sale of a property after the sale is complete.

The definition of an advance fee is a fee, regardless of the form, that is claimed, demanded charged, received or collected by a licensee for a service requiring a license before fully completing the service the licensee contracted to perform or represented would be performed. Business & Professions Code § 10026. There are exceptions, like rental screening fees and certain advertisement. But, for the most part, it...

Over the past few years, the DOJ, on behalf of HUD, has been bringing actions and settling investigations with lenders related to loans underwritten by the lender and insured by HUD (Direct Endorsement or “DE”). Notable actions and settlements include a $1.2 billion settlement with Wells Fargo and an ongoing action against Quicken Loans, just to name a few . In many cases, HUD will take a statistical sampling of loans where HUD has paid on insurance claims related to the loans originated by one lender and, if the failure rate is high enough, accuse the lender of violating HUD rules in the underwriting of individual loans or not complying with overall HUD policies in the operation of the lender’s business.

HUD DE lenders sign annual certifications declaring compliance with all HUD rules. The...

The Federal Fair Housing Act and California’s Fair Employment and Housing Act prohibit discrimination based on familial status. A person offering a property for rent cannot discriminate against a renter (potential or current) for having children. Dissuading renters from renting a certain property or steering them towards a different property is also considered prohibited discrimination based on familial status. One should avoid, therefore, stating “no children,” or a specific number of children, in any rental advertisement. And even subtle suggestions, like “ideal for quiet, professional couple” or “great for a young couple,” could be viewed as discriminatory.  Housing non-profits have been known to scour Craigslist and other places where apartments are advertised to look for advertisement...

Please reload