Odegaard market value

In September 2013, the Arizona Court of Appeals held that commercial borrowers and guarantors cannot prospectively waive their right to seek a fair market value hearing to limit their potential deficiency liability following foreclosure. The Arizona Supreme Court recently decided to review that decision. The ultimate resolution could have a significant impact on commercial lending relationships, including the validity of fair market value waivers in many lenders’ standard guaranties. Background Except for certain residential property, borrowers and guarantors are potentially liable for a deficiency after foreclosure if the remaining debt owed exceeds the trustee’s sale price. A.R.S. § 33-814(A) provides that borrowers, and by extension guarantors, are entitled to a credit on the underlying debt for the greater of the trustee’s sale price or the fair market value of the property at the time of the sale, as determined by the court at a priority hearing. … [Read more...] about Arizona Supreme Court to Decide if Borrowers and Guarantors Can Waive Fair Market Value Defense

In CSA 13-101 Loop, LLC v. Loop l01, LLC, et al., Loop 101 borrowed $15.6 million from MidFirst (which later assigned its rights under the loan to CSA as an intercompany transfer) to build a commercial office building. The loan was personally guaranteed by the Antons and Swankys. After Loop 101 defaulted, the property was sold at a non-judicial trustee's sale for $6.15 million, and CSA asserted a deficiency claim of $11.2 million.The promissory note and guaranty included a provision that expressly waived the benefits of any statutory provision that limited the right of the lender to recover a deficiency judgment after trustee's sale, including the benefits of A.R.S. § 33-814(A). The borrower and guarantors denied that a deficiency existed and asserted the "fair market value" defense under A.R.S. § 33-814(A). Section 33-814(A) provides the right of a borrower to request a hearing on the fair market value of the property at the date of the trustee's sale, and to have … [Read more...] about The Arizona Court of Appeals Holds the Right to a Fair Market Value Hearing Cannot be Waived in a Deficiency Action

In an opinion issued last week, the Arizona Court of Appeals held that commercial borrowers and guarantors ‎cannot prospectively waive their right to limit their damages in a deficiency action on the basis of the fair market value of property ‎sold through a trustee’s sale, potentially impacting any loan agreements that provide for such ‎waivers.‎ The holding does not affect most residential loans, for which lenders are generally precluded from recovering deficiencies.BackgroundA.R.S. § 33-814(A) provides that borrowers, and by extension guarantors, are entitled to a credit ‎on the underlying debt for the greater of the trustee’s sale price or the fair market value of the ‎trust property at the time of the sale, as determined by the court at a priority hearing. The ‎purpose of these provisions is to protect borrowers from inequities that may result if the property ‎is sold below market value. In an effort to avoid … [Read more...] about Prospective Waivers of the Fair Market Value Defense Held Invalid in Arizona Court

In an opinion issued last week, the Arizona Court of Appeals held that commercial borrowers and guarantors ‎cannot prospectively waive their right to limit their damages in a deficiency action on the basis of the fair market value of property ‎sold through a trustee’s sale, potentially impacting any loan agreements that provide for such ‎waivers.‎ The holding does not affect most residential loans, for which lenders are generally precluded from recovering deficiencies.BackgroundA.R.S. § 33-814(A) provides that borrowers, and by extension guarantors, are entitled to a credit ‎on the underlying debt for the greater of the trustee’s sale price or the fair market value of the ‎trust property at the time of the sale, as determined by the court at a priority hearing. The ‎purpose of these provisions is to protect borrowers from inequities that may result if the property ‎is sold below market value. In an effort to avoid … [Read more...] about Prospective Waivers of the Fair Market Value Defense Held Invalid

Until recently, owners of damaged homes in West Virginia had some limits on the amount of damages they could recover in a lawsuit.  Now, the West Virginia Supreme Court of Appeals has significantly revised prior case law and expanded available damages in Brooks et al v. City of Huntington (No. 13-1083), issued on November 13, 2014.  In Brooks, residential homeowner sued the City of Huntington for property damage and the jury awarded repair costs and damages for diminished value of the home.  The Circuit Court reduced the jury verdict to allow for only the lesser of the repair costs or diminished value of the home.  On appeal, the West Virginia Supreme Court of Appeals reversed the Circuit Court for reducing the damage award and issued the following new rules for measure of damages for property damage to residential property.Cost of Repair DamagesThe Court claimed it was issuing a “bright line” rule for damages, holding:"When … [Read more...] about Residential Homeowner Can Recover Costs of Repairs Even If Greater Than Fair Market Value of House