Water Company Ordered to Pay Ojai Playhouse Damages

In 2014, the historic Ojai Playhouse movie theater suffered damage after a water main break caused a flood. Now, a judge has ordered the former water purveyor of the town to pay the establishment $2.7 million worth of damages.

Golden State Water Co. once managed the water system for Ojai. The company was ordered to pay brothers Khaled Al-Awar and Walid Al-Awar, the owners of the playhouse, almost $2 million for repairs made after the theater was severely damaged, which was ordered by Ventura County Superior Court Judge Vincent O’Neill on July 19, 2017.

An additional amount of $400,000 was ordered to be paid to the brothers as well to cover annoyance and discomfort damages. The remainder of the money the judge ordered to be paid was for lost profits. There will be another hearing to determine how much money Golden State Water will have to pay in attorney’s fees, according to John Howard, the attorney for the Al-Awars.

The decision is a victory for the Al-Awar brothers, who are residents of Ojai. The pair has been without their business since the flood damaged the playhouse and an adjoining restaurant, the Village Jester, in July 2014. Ojai Playhouse is located in the central part of the town and has long been a cultural landmark and beautiful structure. The damage done to the establishment has caused a great deal of collective resentment toward Golden State Water throughout the community.

Howard stated that the playhouse isn’t merely a movie theater but a place used by schools and churches and other organizations within the community for all type of events and is generally regarded as a building of historical importance.

The first repairs performed on the playhouse stalled in January 2015 due to a dispute between Golden State Water and its secondary insurance carrier. Khaled Al-Awar stated that the foundation and interior of the building were destroyed by the flood, which occurred over a weekend where there wasn’t anyone around to shut the water off. He reported that the repairs would take between six to eight months at the minimum. He also said that the damage was a complete catastrophe, resulting in literally millions of gallons of water flooding the theater.

The Al-Awars have run the playhouse for over 30 years. Khaled stated that the repairs could not be made until they actually have the money at hand. Golden State Water currently has two months to appeal the order by the judge. His attorney, Howard, believes that an appeal can happen but is unlikely.

Howard concluded that his clients hope there is no appeal because all they want to do is repair the Ojai Playhouse as soon as possible.

Personal Injuries During the Summertime

Summertime is definitely a fun time for everyone. But with the added fun comes dangerous situations. Swimming, hiking and bike riding are just a few of the activities that we love to participate in during the summer, but certainly, there are many more things that we enjoy doing outside in the summertime.

Unfortunately, just one incident is all it takes to turn our world upside down. And when we suffer personal injuries, it can be difficult to recover.

The Dangers of Summer

There are many dangers associated with outdoor activites in the summer. Swimming is one of the most deadly activities, and many people lose their lives each year in the swimming pool. Any property owner who has a pool should make sure that the pool gates are secure and locked at all times while not in use or at home. If your neighbor decides to take a swim and can easily access your pool, then somehow injuries himself, either seriouslly or fatally, as the homeowner, you may be found liable.

Another danger is bike riding and are the result of many personal injuries. Kids love to get on their bikes and take long rides, so it’s up to you as a property owner to ensure that your property is safe for passerbys. This means that if you have cracks in your sidewalk you may want to consider fixing those cracks before the summer season begins. If a child falls on your property and it’s found that you knew about the dangerous conditions but failed to rectify them, you could be held negligent for that child’s injuries.

If you’re a boater, be sure that all passengers on your boat wear the proper safety restraints. If you hike, make sure you wear proper hiking shoes. If camping is your thing, make sure you stay safe while enjoying the campfire.

If injured during summertime activities, talk to an attorney who is experienced in personal injuries. You want to ensure that you receive the best advise possible and get the compensation you deserve.

Using 1031 Exchange Property as a Vacation Home

Section 1031 of the Internal Revenue Code allows taxpayers to exchange property held for productive use in a trade or business or for investment (hereinafter referred to as “qualified use”) for like-kind property on a tax-deferred basis. Deferred taxes means more funds to put toward replacement property(ies). You may even be able to afford to buy a replacement property in a desirable vacation area—and may be tempted to convert the property to personal use. A pure vacation home or personal residence will not meet the qualified use requirements, however, the IRS does allow some limited personal use of 1031 exchange property.

The IRS provides a two-year safe harbor in Rev Proc. 2008-16, under which replacement property will qualify as “held for productive use in a trade or business or for investment.” The requirements are as follows:

  1. The property must be owned by the taxpayer for at least 24 months immediately after the exchange, and
  2. For each of the two twelve-month periods immediately after the exchange:
    1. The taxpayer must rent the property to another person at a fair rental for 14 days or more, and
    2. The taxpayer must limit personal use of the property to the greater of: i) 14 days or ii) 10% of the number of days during the twelve-month period that the dwelling is rented at a fair rental. Personal use includes personal use by family members, renting the property for less than fair market value, and vacation home swap arrangements.

In other words, if you qualify under the safe harbor, you can use the property for up to 14 days of vacation (or other personal use) per year for the first two years. Similar rules apply for using “relinquished property” for personal use prior to an exchange. At the end of the two-year safe-harbor period, you should be able to convert the property to personal use without fear of invalidating the previous exchange under the qualified use rule. This assumes that the exchange does not run afoul of other 1031 exchange requirements. You should engage a qualified tax attorney to review your exchange before converting the property to personal use.

Outside of the safe harbor, the question of whether property is held for qualified use is a factual question of the taxpayer’s intent at the time of the exchange. An exchange not meeting the requirements above could still potentially qualify for tax deferral, however, such an exchange would incur a heightened risk of IRS audit. If possible, it is always recommended that exchangers comply with the safe harbor.

The foregoing is intended for informational purposes only, and is not to be used or disseminated as tax advice. The risks in any 1031 exchange will depend on the facts and circumstances of the exchanger. If you are considering a 1031 exchange, you should engage a qualified tax attorney to navigate the many complexities contained in the Code and IRS and Court rulings.

What is Probate in California?

Sitting down and having a discussion about what will happen to your assets and finances after you pass away is certainly not an easy thing to do, but it’s something that should be done. You should start your estate planning as early as your graduation from college, and especially once you’re married with children.

When you pass away, most likely your estate will pass through the probate process. This process is the official way your estate is settled through the supervision of probate in California. The estate is frozen until the court determines the Will is valid, all relatives have been notified and that all of the property in the estate is identified. The court will also ensure that creditors and taxes are paid. Once that is all done, an Order is issued by the court for the distribution of the remaining assets. If you die without a will, the court will determine who is appointed as the administrator of the estate and will determine who receives your assets based on a “family tree” of surviving relatives.

Not All Property is Subject to Probate in California

Not all of your property will go through this process. You may have accounts or insurance policies that already list beneficiaries, and in those instances, the assets pass directly to those beneficiaries. If you have a property that you own jointly, the property also passes to the joint owners immediately upon your death.

The Probate Process

Once a descendant has passed away, the Will is filed with the court, along with a petition. Notice will be given to all beneficiaries and heirs, and a notice is published in the paper regarding the proceeding.

From there, Letters Testamentary is issued to the executor of the estate and that gives that individual the legal authority to act on behalf of your estate. The executor must collect an inventory of your assets and file that inventory with the court. The court then issues an order to distribute the assets once all bills are paid.

Contact Lowthorp Richards if you need more information regarding estate planning or probate in California.

Beware of These Pitfalls When Selling Property in a 1031 Exchange

Looking to trade in an old investment property for something new? Section 1031 of the Internal Revenue Code allows taxpayers to defer the recognition of gain on business or investment property exchanged for like-kind property. Although this seems simple on its face, below are several common pitfalls.

  • Failure to properly use a qualified intermediary (also referred to as an exchange facilitator)

The word “exchange” is applied quite literally in Section 1031. You must exchange the old property directly for the new property, without receipt of any sale proceeds. Because the odds of finding someone who is willing to swap properties is incredibly low, most people must use a qualified intermediary to comply with the “exchange” requirement of Section 1031. The funds from the sale of the relinquished property are paid directly to the qualified intermediary, who uses the funds to acquire the replacement property. The qualified intermediary also handles the exchange of title with the buyer of the relinquished property and the seller of the replacement property. You may need to come up with separate liquid funds or financing if the replacement property is more expensive than the net proceeds from the sale of the relinquished property. Continue reading

Baby Boomers Looking at Retirement – Business Succession Plans Crucial

It has been commented that working for oneself is great because you get to work half-days. You even get to choose which half – the first 12 hours or the second. Funny as that may seem, Baby Boomer generation business owners smile knowingly, and the thought of retirement is alluring. Logistically, however, said Boomers might find themselves in a pickle when it comes to business succession, unless they focus now on some forward-thinking. Continue reading

10 Things You Should Know About Probate

1. Death of a Loved One

Following the death of a loved one, such as a parent, the first and foremost priority is “family.” Nothing should precede that. The business of the estate comes after devoting full attention to remembering your dearly departed, being with friends and family, and allowing friends and family to pay their final respects. Everything else is on hold. The liabilities of the estate will wait for now. If there is a mortgage on the house, it can go late for now. Fortunately, credit scores for the decedent, are now meaningless. Just collect and organize the mail, but focus for now on family. In fact, the business of administering the estate can remain on hold until you receive the certificate of death from the funeral service or office of vital records. Your receipt of the death certificate will prompt you to begin administering the estate. Continue reading