Wells Fargo v. 6354 Figarden General P'shipAnnotate this Case
This appeal presents issues of statutory construction involving Code of Civil Procedure section 729.0601 and the calculation of the redemption price for real property sold by judicial foreclosure. At issue was when the property subject to redemption contains multiple parcels, some vacant and unimproved and some improved with offices occupied by rent paying tenants, is the sole measure of the offset “the value of the use and occupation of the property to the purchaser” for the entire property? The court concluded that it is not the sole measure because the statute allows the trial court to calculate the offset by adding (1) the amount of rents paid for the improved portion of the property with tenants and (2) the value (i.e., monetary worth) to the purchaser of the use and occupation of the unimproved and unleased portion of the property, if any such value was realized. In this case, the trial court’s finding that the purchaser’s use and occupation of the unleased portion had no value is supported by substantial evidence. Therefore, the court concluded that the trial court did not err in reducing the redemption price only by the rents paid. Also at issue was whether the the offset to the redemption price for “rents … paid to the purchaser” refer to gross rents or net rents? The court concluded that subdivision (c) of section 729.060 refers to net rents. Consequently, the redemptioner suffered no prejudice when the trial court subtracted the management fees and operating expenses related to the business of the renting units of the property from the redemption price as “reasonable amounts for … maintenance, upkeep, and repair of improvements on the property” because, if not treated as costs of maintenance and repair, those fees and expenses should have been deducted from the gross rents added to the redemption price. Thus, the final redemption price would have been the same if the management fees and operating expenses had been accounted for in calculating the net rents, rather than in calculating the maintenance and repairs. Accordingly, the court affirmed the order determining the redemption price.