On top of being their own cause of action that can be asserted in a lawsuit, waste claims can also potentially be raised in partition actions during the accounting stage. This allows property owners to approach the issue in the manner they see fit. Yet, understanding the contours of a waste claim is not as simple as it may seem. There are situations where damage to property is justified, meaning parties cannot always recover damages for the seemingly unjust actions of their co-owner(s).
In these situations, having an experienced real estate attorney at your side can make all the difference. The Underwood Law Firm encounters waste claims with regularity and is well-equipped with legal expertise to help guide those with property interests through this unique legal issue.
What is the legal basis for a waste claim?
Waste claims are based on two California statutes that provide for liability when waste is committed. But these statutes are heavy on legalese and not entirely clear on their own. The California Civil Code has a series of statutes that prevent waste from life tenants and lessors. (Civ. Code §§ 818, 821.) And the Code of Civil Procedure allows for “treble damages” when waste is committed by a joint tenant or tenant in common. (CCP § 732.)
The appellate courts, thankfully, have simplified these rules over the years. Now, a waste claim can be brought by anyone who “possesses” land, greatly expanding the availability of the remedy.
“Waste is conduct (including in this word both acts of commission and of omission) on the part of the person in possession of land which is actionable at the behest of, and for protection of the reasonable expectations of, another owner of an interest in the same land.” (Schellinger Brothers v. Cotter (2016) 2 Cal.App.5th 984, 1000.)
In providing this rule, the courts signaled that waste claims are to act as a means of leveling the playing field between interest-holders. “Waste is, functionally, a part of the law which keeps in balance the conflicting desires of persons having an interest in the same land.” (Cornelison v. Kornbluth (1975) 15 Cal.3d 590, 597–598.)
What is required to prevail on a waste claim?
Any party asserting a claim of waste must show two things. First, they have to prove the defendant is under a duty to preserve and protect the property involved. (Schellinger, 2 Cal.App.5th at 1000.)
A “duty” is the legal way of saying that someone owes a very serious responsibility to another person. The law imposes duties on all sorts of formal legal relationships to ensure that those involved do not damage each other. For instance, duties are found between cotenants of real property, partners in limited liability or general partnerships, and corporate board members, just to name a few.
Second, a plaintiff asserting a waste claim must show damage to the property sufficiently substantial and permanent to cause injury to its interest in the property. (Avalon Pacific-Santa Ana, L.P. v. HD Supply Repair & Remodel, LLC (2011) 192 Cal.App.4th 1183, 1213.)
This second requirement is not easy to prove, as damage to property is not always “permanent” enough for a court to entertain a potential lawsuit.
What is substantial and permanent property damage?
Usually, a party asserting a waste claim will go about it by asserting that the waste damaged the value of the property. This method is standard, but the burden of proof is high. In order for damage to be substantial and permanent enough, there must be a “substantial depreciation in the market value” of the property. (Smith v. Cap Concrete, Inc. (1982) 133 Cal.App.3d 769, 776.)
Smith is the bright-line example of an obvious waste claim. There, more than 60 truckloads of “broken concrete material” was dumped on the property at the behest of a subletting tenant trying to develop the land. For whatever reason, the tenant abandoned the project, leaving the concrete sitting all around the property for months on end.
Considering the quality and nature of the property, the appellate court noted the damage was palpable. “Depreciation of the market value of the property in its present condition can be easily inferred from the stipulated facts.” (Id. at 777.)
Does the property damage need to be intentional?
No. While Smith is an egregious example of waste in action, it usually isn’t the type of conduct courts encounter when fielding waste claims. More often than not, property depreciates over time due to mismanagement and negligence.
In arguing a waste claim, proof of an overt destructional urge is not required, nor is bad faith a necessary element. (Schellinger, 2 Cal.App.5th at 1001.) Defendants may have had the best of intentions, but that does not entitle them to escape liability for waste. (Fait v. New Faze Development, Inc. (2012) 207 Cal.App.4th 284, 299)
Is property damage always considered waste?
No. As stated above, a waste claim requires a duty or obligation to protect the value of the property, which is not always present. Cotenants, for instance, owe each other various duties of care. But they are also entitled to unilaterally “improve” the property with projects, encumber their own interests with liens, and possess the whole of the property as they see fit.
A cotenant might find that their fellow co-owners enjoyment of their property rights is damaging the value of the land, but that may not be enough to plead waste if that enjoyment is within the rights typically associated with owning property.
For example, “Shawn” and “Julie” are co-owners of a property. Julie wants to develop the property and begins building out the backyard. This necessitates concrete, gravel, and dirt being dropped off at the front of the house every week. While this could be considered waste in the same vein as Smith, there is no question that Julie has the right to improve the property through a project.
How do you assert a waste claim during a partition?
Waste claims are usually their own causes of action in lawsuits, but there is support for the possibility of asserting a waste claim during the accounting portion of a partition action.
Partitions are actions governed by the principles of equity. This means that courts will do what they see as fair and are not always bound by the strict rules of judicial procedure. At the end of every partition, the court will conduct an accounting to determine the amounts of money parties will receive from the sale of the property. And “the court may, in all cases, order allowance, accounting, contribution, or other compensatory adjustments among the parties according to the principles of equity.” (CCP § 872.140.)
Thus, a party could bring up a waste claim at this late juncture. The same burden of proof, however, would apply.
How can the Attorneys at Underwood Law Assist You?
Waste claims are difficult to prove on their own. The added emotions of seeing one’s property diminish in value only add to the frustration some property owners may feel when confronting a waste claim. That said, with the right legal assistance, recovery may be possible.
As each case is unique, property owners would be well-served to seek experienced counsel familiar with waste claims and partitions. At Underwood Law, our knowledgeable attorneys are here to help. If you are concerned about being sued for waste, seeking to file suit yourself, or if you just have questions, please do not hesitate to contact our office.
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