Legal Notice Blocking Condo Sales Lifted : Judge Says Notification of Suit Created ‘Havoc’ for Homeowners

A legal notice that has prevented the owners of 491 so-called affordable homes from selling their properties for the past six months was lifted Friday by an Orange County Superior Court judge.

Saying the notices of a pending lawsuit were wreaking havoc on homeowners caught in the middle of a fight between a renters’ group and county officials, Judge Linda McLaughlin granted the county’s petition to remove the notices, called lis pendens.

The notices were attached to the homeowners’ deeds to inform potential purchasers of a lawsuit, filed two years ago by the Orange County Renters Assn., that seeks to reinstate resale price controls on condominiums built under the county’s defunct affordable housing program.

No Legal Grounds

But McLaughlin said the notifications had been improperly attached to the condominium titles last November. There were no legal grounds for the action, she said, because lawyers for the renters group failed to prove that the outcome of the lawsuit over the county’s affordable housing policy would affect the homeowners’ titles or rights of possession.

Moreover, McLaughlin scolded Carlyle Hall, an attorney for the Los Angeles-based Center for Law in the Public Interest, for disrupting the lives of so many people. “Surely you recognize, Mr. Hall, that burdening property with a lis pendens causes that property to be virtually unmarketable,” she said.

She added that Hall could have more appropriately tested the legality of the title notice by initially attaching it to just one of the 491 deeds. The condominiums are located in five complexes in the Saddleback Valley and one in Yorba Linda.

“The court just simply does not understand an approach of imposing havoc on people in a serious financial way, particularly when they are of low and moderate income, when there is an obvious, easy method to determine the viability of the lis pendens,” the judge said.

Applause and Rejoicing

The decision prompted applause and rejoicing from about 150 homeowners, mostly young couples and some with children in tow, who filled the courtroom and the hallway outside during the Friday morning session.

The county took legal action on the homeowners’ behalf after representatives of the group claimed they could not afford to go to court on their own.

Also coming to the support of the homeowners was the California Assn. of Realtors, which joined in the county’s legal motion as a friend of the court.

However, attorneys for the Orange County Renters Assn. and for renter Christine Moseley said they would appeal Friday’s decision. Moseley and the renter group have jointly filed suit in an attempt to reverse the county’s 1983 decision to abandon its mandatory affordable housing program.

The renters’ association lawyers argued in court Friday that notice is necessary to alert prospective buyers that resale controls could be reinstated because of the lawsuit.

Controls Would Limit Price

Those controls would limit the price for which the condominiums could be sold and would set income standards for future home buyers. So far, Hall said, the county has notified only the original owners of the property of the pending lawsuit.

Hall told reporters Friday it would be legally impossible to reimpose resale controls on homes sold to persons who are unaware of the lawsuit.

Without the notices, he said, there might be few homes left on which resale controls could be reimposed if the court rules in the renters’ association favor.

Hall said the lawsuit over the affordable housing program is expected to go to trial later this year but that the ultimate decision could be delayed by appeal.