Donna Ferrell, Broker, SFR, AHWD, HAFA, CRS, GRI, CRB, 203k, CMCA, CDPE, RCC

by Ryan Vaillancourt

Published: Monday, July 12, 2010 1:47 PM PDT http://www.ladowntownnews.com/articles/2010/07/14/news/doc4c3757c425da2806720748.txt

DOWNTOWN LOS ANGELES - A bizarre property dispute reverberated through the Historic Core last week, after a popular wine bar was abruptly shuttered and a new tenant began readying the space.

On Saturday, July 3, at 2:45 a.m., movers began taking out bar stools, tables, at least three refrigerators, $50,000 worth of wine and beer and other items from popular spot The Must. The locks were also changed on the establishment at Fifth and Spring streets.

The situation grew out of a dispute between Must proprietors Coly Den Haan and Rachel Thomas, and Julie Rico, owner of the adjacent hot dog purveyor Weeneez. Rico, who leased the two adjoining spaces from Denver-based building owner Simpson Property Group, has sold her business. In purchasing Weeneez, the new owner, who has not been identified, has taken control of both spaces.

Den Haan and Thomas, who opened The Must in 2008, contend that they have an operating agreement with Weeneez that gives them rights to the spot through January 2012, with an option for a five-year extension. They said they were not notified of the ownership change or the plan to remove The Must's furniture or inventory, and only found out Saturday morning, after the space had been cleaned out.

"No verbal, no written, nothing," Den Haan said. "They claimed they sent something; it was not received."

Den Haan and Thomas have filed an illegal lockout report with the Los Angeles Police Department, which by late last week had yet to complete an investigation. But LAPD officials say the conflict appears to be civil rather than criminal in nature.

The Must property was moved to a storage facility, and the owners were notified of the location via a sign on the venue's door. Den Haan and Thomas have not visited the facility on advice of their attorney, they said.

Complex Contract

The Weeneez ownership disputes Den Haan and Thomas' claim that their agreement rendered them a legal subtenant and entitled The Must to occupy its space through at least January 2012.

The agreement that the entities struck in 2008 does not resemble a traditional commercial lease, said Cole Stuart, an attorney who represents Rico and her former Weeneez co-owner Sid Carter. While The Must owners considered themselves a subtenant, Stuart said that neither Den Haan or Thomas, nor their company, were mentioned in the lease with Simpson.

Instead, Stuart said, The Must team was a stakeholder and business partner in Weeneez, operating a separate venture in the same space. That came about because, before they moved in, Den Haan and Thomas bought a 10% stake in the hot dog operation as a means to occupy the space.

Weeneez was the only business to officially pay rent for the space, Stuart said. Thomas disputed that, saying that on certain occasions, The Must paid rent checks directly to Simpson.

Representatives of Simpson Property Group declined to comment.

Although most months Thomas said she submitted checks to Rico and wrote the word "rent" on the memo line, Stuart said that technically the payments were not rent.

"They were partnership payments for the joint venture," said Stuart, who acknowledged that the payments did cover a portion of the rent that Weeneez paid to Simpson.

Another unusual arrangement centered on the liquor license. The Must operated under a license owned by Rico and Carter, though Weeneez did not sell alcohol. That set-up may have flouted the law, said Will Salao, district administrator for the California Department of Alcoholic Beverage Control.

"If someone else is running the license [owned by Weeneez], they run the risk of their license being revoked," said Salao. "If Weeneez is not operating that license, whoever is in there now is operating illegally."

The tenant who is building out the space for a new establishment called J.P. Lounge could legally operate with the Weeneez license, but the transfer of ownership requires notice to the ABC. Last week, no notice had been registered, Salao said.

Simmering Dispute

The sudden closure of The Must sparked an uproar in the community. In the two years since it opened, the wine bar had become popular for its wide array of bottles from around the world, a carefully curated beer selection and a deliberate attempt to make itself feel like a neighborhood bar.

The venue regularly hosted game nights and sometimes served 40-oz. bottles of malt liquor in paper bags, or in ice buckets with champagne flutes, as if to flout the wine bar stereotype. Last year, it received an award from the Downtown Breakfast Club for the best new bar.

The overnight shutdown is the cornerstone of The Must owners' argument.

"Weeneez and Simpson probably could terminate the lease prematurely, but their failure to give The Must notice of their intent to do so was, in my view, fraud," attorney Thomas Moore, who is representing Den Haan and Thomas, said in an email.

The July 3 takeover of The Must space, while sudden to patrons, represented the boiling point of a long-simmering feud. The disagreements led Rico to fear for her safety, according to her attorney. Den Haan said the disputes were strictly business related, and that she has video footage of herself and Rico pleasantly discussing art in their shared office less than two weeks ago.

In February, Den Haan and Thomas filed for arbitration to resolve a series of conflicts tied to the operating agreement. A hearing was set for July 23, though Weeneez officials have since requested it take place sooner.

In filing for the hearing, Moore hoped to resolve a number of disputes, and argue that Weeneez was in violation of its own lease with Simpson by profiting off The Must's business.

"One of the things that caused this dispute was that [Den Haan and Thomas] discovered that The Must was paying over 80% of the rent while occupying 55% of the space," Moore said. "The idea behind the arbitration was to reform the agreement between Weeneez and The Must to bring it in line with the master lease."

Unsettled Dust

Den Haan and Thomas last week applied for an emergency restraining order that would ban all parties, including the new tenant, from the now controversial space. The arbitrator had not ruled on the request by press time.

Rico, who would only comment via email, said the new owner is building out both spaces for a "concept" restaurant.

"The new team is busy putting together their restaurant [and] there is a lot to do," Rico said.

Although it is unclear whether The Must will ever re-occupy its former space, the Weeneez attorney indicated that his client anticipates negotiations for damages potentially incurred during the movement of The Must's mostly liquid inventory, the preservation of which requires temperature control.

"[Rico and Carter] know they'll face these potential claims," Stuart said. "That's why they hired professional movers, and had security handy. They made every possible effort to not damage anything."

Stuart said he is reaching out to The Must's lawyer with an offer to pay them "tens of thousands of dollars, to put money in their pockets immediately," so that they might open in another space sooner rather than later.

"In addition to the humanitarian nature of it, it mitigates the damages they can claim against us," Stuart said.

Weeneez also plans to negotiate a deal to pay Den Haan and Thomas for their stake in the hot dog business, now that it has been sold.

Contact Ryan Vaillancourt at ryan@downtownnews.com.

page 1, 07/12/2010

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This is outragous!!

This is a huge deal. I see many fine Realtors get the shaft for the fact they are gay or lesbian. I am so proud to be part of such a fine organization. Real Estate has a very strong stigma of being stuffy and narrow-minded. This goes to show things are changing.

NAR http://www.realtor.org/rmodaily.nsf/pages/news2010051701?opendocument

Board Approves Sexual-Orientation Protections The NATIONAL ASSOCIATION OF REALTORS®' Board of Directors, which met on Saturday at the tail end of the Midyear Meetings & Trade Expo in Washington, D.C., approved a rule that bans REALTORS® from denying equal professional services to a customer on the basis of sexual orientation. The board amended Article 10 of the Code of Ethics, which addresses "duties to the public." That part of the Code already prohibits REALTORS® from discriminating against customers on the basis of race, color, religion, sex, handicap, familial status, or national origin. Standard of Practice 10-3 was also amended to prohibit discrimination on the basis of sexual orientation in any advertisements for selling or renting property. The change, met with applause, was passed unanimously by the Professional Standards Committee earlier in the week.

The measure will now go before the NAR Delegate Body for approval at NAR's annual conference in November. Many other agenda items also were discussed and acted upon at the board meeting. Here's a roundup of the highlights: Realtors Property Resource.Despite the tough economy, NAR continues to focus resources on keeping its members central to the transaction well into the future by moving forward with two Second Century Initiatives, the Realtors Property Resource (RPR) and REALTOR® University. RPR will contain deep information on every property and parcel of land in the country. About 1,000 NAR members are currently testing the software in 12 beta markets, said RPR CEO Dale Ross. Members are also testing the applications that will deploy the data on handheld devices. Once testing is completed, those 12 markets will be the first in which the database is rolled out. NAR continues to buy and license the public record data that will comprise the core of the database. The goal is to overlay all that data with data from MLSs. Ross emphasized that RPR will not license or syndicate MLS data. The information will be used solely for creating deep analytical reports - the hallmark of the product - for use by REALTORS®. Full roll-out is expected to take five to six years.

REALTOR® University.REALTOR® University is NAR's initiative for raising the bar in the profession by undertaking an accredited, degree-granting university. A blue-ribbon panel started work earlier this year on the initiative, which will result in a master's degree program with majors in real estate sales and marketing, real estate brokerage, and appraisal, among others. It's expected to take two to three years for the institution to become accredited. "If you want the 'university' attached to REALTOR®, you have to play by (academia's) rules," said Richard Rosenthal, CRE, of Venice, Calif., NAR's liaison for special projects. Students will access the REALTOR® University curriculum online. In addition to master's degrees, the university will eventually feature internship and job-placement programs, as well as an applied research center. NAR financials strong. Although it's been a difficult two years, NAR remains in strong financial shape.

The association's 2009 financial statements received an unqualified opinion of conformance with Generally Accepted Accounting Principles from accounting firm Crowe Horwath LLP, according to Treasurer James L. Helsel Jr. In addition, 2010 membership stands at 1,079,000, nearly 2 percent above budget. Against this backdrop, the Board voted to maintain NAR dues at $80 and keep the Public Awareness Campaign special assessment at $35 for the three-year budget cycle, 2011-13. 2011 Leadership. The board recognized the association's 2011 slate of officers: President: Ronald Phipps, Warwick, R.I. President-elect: Maurice "Moe" Veissi, South Miami, Fla. First Vice President: Gary Thomas, Aliso Viejo, Calif. Treasurer: Bill Armstrong, Damascas, Md. The Treasurer seat was contested: Armstrong was elected over Mike McGrew of Lawrence, Kan., by ballot during the meeting. Professional standards, MLS policy changes.

In addition to the vote to ban discrimination on the basis of sexual orientation, the Board passed a number of policy changes. Established authority of MLSs to require, as a matter of local discretion, submission of photographs, drawings, or renderings of listed property as a condition of inclusion in MLS. Established authority of MLSs to require, as a matter of local discretion, submission of legally required seller disclosure forms as a condition of inclusion in the MLS. Clarified that, if time on market and price change information are collected by the MLS, those fields cannot be treated as confidential and may be provided to clients and customers; however, MLSs may prohibit inclusion of time on market and price changes in advertising, including IDX, by other participants.

Amended the Code of Ethics and Arbitration Manual to give associations discretionary authority to refund portions of parties' filing fees if the dispute is successfully resolved through mediation. The directors also amended MLS policy statement 7.23. MLSs that permit listing participants to communicate to other participants how reductions in gross commissions will be apportioned between listing and cooperating participants in a short sale will now have additional discretionary authority to require listing participants to give cooperating participants written notice of the total reduction in gross commissions, and the resulting reduction in cooperative compensation. Work group will be formed to look at two IDX-related issues: whether national franchise organizations should be permitted to index IDX listings and whether RSS feeds can include IDX listings. Keeping ethical standards high. In a separate measure, the Board took action to apply the same ethical standards to REALTOR® association that apply to their members. Under the change, associations are prohibited from making false or misleading statements about other associations. The board also approved procedures for addressing accusations of violations. Distinguished Service Awards.

The 2010 Distinguished Service Award recipients were announced. Joe Hanauer, CIPS, CRE, of Laguna Beach, Calif., and Fred Prassas, CPM, GRI, of La Crosse, Wis., will be formally recognized at the 2010 Annual Meeting in New Orleans in November. Legal action funding.Funding of $178,983 was approved for four cases involving a commission dispute, whether administrative fees charged by a brokerage violates RESPA, the legality of a brokerage's mortgage lending and title operations, and defense of a patent-infringement case. REALTORS® Federal Credit Union.The REALTORS® Federal Credit Union, launched last year, has $60 million in deposits, making it bigger than almost 80 percent of all credit unions after just one year, reported Tom Glatt, CEO. Other stats: 133 local associations, 24 state associations, and 18 MLS have their funds on deposit with the credit union, accounting for about $30 million. REALTOR.com Update.The official property listing site remains far above its competition in site traffic, recording 12 million unique users in April. That was a record in the 14-year site history, according to NAR's Move Inc. board representative Cathy Whatley. (Move Inc. operates REALTOR.com on behalf of NAR.)

The site enjoyed 24 percent growth over last year. With 17.5 million visits and 400 million page views each month, the site is seeing serious engagement, says REALTOR.com President Errol Samuelson said in a report to the board. REALTOR.com's iPhone app, the fastest growing iPhone app in the real estate space with more than 700,000 downloads, gives mobile users access to all listings at the site. Consumers can add their own notes on each property, share properties with their listing agent, and post listings to Twitter and Facebook. REALTORS® Political Action Committee.Donations are more than halfway toward the association's goal for 2010 and stand at 9 percent over where donations were at this time last year, said Chris Polychron, CRS, GRI, NAR's political fundraising liaison. The number of major donors is up 3 percent, said Phil Smaby, GRI, RPAC Major Donor Council chair. Smaby announced a goal of having 1 percent of members reach major donor status by 2015. Broker Involvement Program.

Membership in the program-which enables real estate agents to learn about legislative Calls for Action directly through their broker-has increased to more than 4,000, with 400 applications for brokers pending, said Bob McMillan, Member Mobilization liaison. The goal is to sign up 6,000 brokers by the end of the year. Call for Action.The Board was advised of an NAR Call for Action today on two issues of concern mainly to practitioners working with investors. NAR will be asking members to urge their members of Congress not to penalize real estate partnerships in proposed tax changes to the carried interest of general partners in investment partnerships, and to vote against changes to Form 1099 filing requirements that could impose a substantial administrative burden on rental property owners. President Vicki Cox Golder exhorted members to participate in the CFA even if the issue doesn't concern them directly. "Just because an issue doesn't impact you," she said, "it's still important you respond because the next issue that comes up could impact you." -Robert Freedman, Stacey Moncrieff, and Brian Summerfield, REALTOR® Magazine

You see it every month in the Associations financials. There is $1.00 for one letter, $.25 cents for copies, $40 for mailing, and extra $500 "Admin"! What the heck is "Admin"? Then when you go to get a straight answer, many times you'd discover there is not a real reason for these expenses.

You ask yourself, "How did we get here?"

Most firms present their potential clients with a low-balled rate, then jack up the costs on the back side once they get the contract. Great for them, bad for Associations, especialy those with little to no money. Associations need to be very cautious in these shakey times as companies are losing clients, and having to make up the loss in the back end.

How to protect yourself:

• Every year, re-negotiate your agreement with your management company in regards to these "extra fees".
• Look for property management firms which offer flat rate fees with little to no "other"/"extra" costs.
• Make sure that the firm can handle your HOA efficiently by fully utilizing technology/venues currently available to all, like paying on-line (vs. cutting checks and mailing), coupons (vs. monthly statements), communicating with Board members and homeowners through email for day-to-day matter/questions, etc.
• Work with your management firm to help them find ways of cutting their costs to pass the saving on to you. A simple check scanner can be a world of savings -- no more going to the bank which can add up with gas as expensive as it is now... If they save money, you'll save money as well.
• If your property management firm only allocates so many hours a month to the Association, form committees to perform research so time is not wasted by the management firm to do something the committees can do.

Associations need to take control of the spending; rising dues, and collections are at an all time high, and any dime that can be saved needs to go to your Association.

There are some myths about real estate agents, many of which are not so flattering. But when it comes down to it, real estate agents are not too out there, and there is a logical explanation to each misconception. Let's straighten out a couple myths and facts.

Myth #1: They have big hair.

Fact: Though occasionally real estate agents do have big hair, most are regular people who get up in the morning just like you do, and go to work just like you do. Many real estate agents, in fact, are going bald due to stress related hair loss. Same with the fancy dagger-shaped manicures; in actuality, many real estate agents have bitten their nails down to nubs.

Myth #2: Real Estate Agents drive luxury cars while talking on their cell phones.

Fact: Its true that real estate agents are often trying to do too many things at once, but they like to be careful about it. And though real estate agents would like to make a good impression on you, more often than not they drive Hondas and Toyotas and hope that their hard work will sell you, not their Lexus.

Myth #3: Real Estate Agents know your area.

Fact: Just like normal people, real estate agents can't know everything. Though they do spend a lot of time driving around town, they can't be in all places at once, and they themselves probably have preferences for one neighborhood versus another. Make it clear to your realtor what kind of area you want to live in, and they can help you look within that section of town.

Myth #4: Real Estate Agents live outside of time.

Fact: Real estate agents have lives too, and those lives happen to take place in the same physical realm as yours does. While it might seem like they spend a strangely disproportionate chunk of time speaking with you, they are actually trying to be as time-conscious as possible, so that you can move more quickly into your home and they can move more quickly to helping their next client.

Myth #5: Real Estate Agents just want your money.

Fact: What real estate agents actually want is an easy life. They want to help you find a home you love, and they want to make their (often small) bit of commission off of it (and that's off the sale, not out of your pocket). They do not want your soul or your firstborn, just some patience, consideration, and a positive home-buying experience for all.

So hopefully we have cleared up some of these common mistakes about real estate agents. We are just like you. You have to love the job to be a real estate agent. This job is not for the faint at heart.