3025 Scott Street
In 2006 the “Vintage Cow Hollow Edwardian” in need of some “TLC” at 3025 Scott Street was purchased for $2,750,000 by its uphill neighbor(s) in what would appear to have been a strategic bid to protect views.
Four years later, and with an easement aimed at restricting any increases in height newly attached, the property returned to the market listed for $2,100,000. Failing to sell in 2010, the property was relisted for $1,900,000 with “one day” on the market in January.
Thirteen days ago the sale of the 2,557 square foot Cow Hollow fixer officially closed escrow with a just now reported contract price of $1,800,000 ($704 per square foot). Call it a little over a million dollars spent to protect a few million dollar views and a 35 percent ($950,000) drop in value for the property.
A Vintage Mini-Vertical For The Cow Hollow Fixer At 3025 Scott [SocketSite]

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Comments from “Plugged-In” Readers

  1. Posted by EH

    I’d love to see the buyer go after the view easement given circumstances. If property people are going to be crazy, I’d at least like to get a spectator sport out of it.

  2. Posted by Contango

    Million Dollar Views for the New Owner
    Now the new owner can file quiet title to Extinguish the View Easement on grounds that the View Easement was never valid in the first place because the “the Dominant And Servient Parcels Of Land Were Joined Under Singular Ownership”.
    From what I see, View Easements (like blocking lot line windows) are private agreements between individual property owners in San Francisco which can be revoked anytime by either party and can not legally transfer with title unless all parties agree.
    “The Court of Appeal concluded that the view easement was extinguished by merger when the two parcels of land were unified under singular owners, and that the view easement was not revived upon the sale of each piece of property to two separate owners.”
    Zanelli v. McGrath, (— Cal.Rptr.3d —, 2008 WL 4051032, September 2, 2008)
    http://www.kmtg.com/data/rc_legal_alerts/alert.php?useSpr=&IDD=1181937979

  3. Posted by sfrenegade

    Contango, I’d love to see the documentation here as well, but I believe this case can likely be distinguished from Zanelli. In Zanelli, the easement was created first, then the dominant estate’s owner bought the servient estate, extinguishing the easement. That owner then failed to reinstate the easement by putting it in the new deed for the formerly servient estate.
    In this case, my guess would be that the new deed for 3025, the servient estate, likely included the easement.

  4. Posted by A.T.

    I’m willing to bet that the sale/transfer documents crossed all T’s and dotted all I’s with respect to the easement.
    Regardless, that’s a 35% drop in price. Attribute 5% to the easement and 30% to the market. Or, if you want to be extremely conservative, call it 25% market and 10% easement. 2006 was not a good time to buy.

  5. Posted by EH

    Only 10% to the easement? What do the apples say about your -25% market assertion? Just curious.

  6. Posted by Contango

    Even if it were recorded in the deed & prelim, the View Easement should still be extinguished due to the fact that the seller does not have the right to sell something that he does not own (light, air, view) and the specific inclusion in the deed was in error.
    In this case, it appears the seller purchased a property with the intent to record a view easement to benefit his primary property not realizing or being ill-advised that this kind of easement cannot transfer with title to a new owner. The easement was created when the same “interests” owned both parcels which is invalid in the first place and automatically is extinguished when title is transferred to somebody else.
    Things are recorded all the time that appear on preliminary title reports where only after escrow has closed, sometimes generations later, are discovered as invalid and render the title questioned.
    I have witnessed many view disputes and in every case, to my original surprise; I’ve learned that nobody legally owns rights to views in San Francisco.

  7. Posted by halpern

    Why not just buy, build and have it litigated? By the time this gets through the courts, they’ll have a 5 story building already. Then, if you lose, you can have a “controlled” demolition that will transform the whole block into an ash and soot covered hellhole. Take that light easements!

  8. Posted by [anon.ed]

    “Attribute 5% to the easement and 30% to the market. Or, if you want to be extremely conservative, call it 25% market and 10% easement. 20″
    You’ve never demonstrated the ability to rate anything, one. And your call there was sheer baiting + nonsense, two. It’s every bit a million dollar view on that block.

  9. Posted by conifer

    Contango:
    What about the easement that 2000 Washington has over the house below it on the corner of Jackson and Gough?
    Is that invalid too?

  10. Posted by sfrenegade

    “I’ve learned that nobody legally owns rights to views in San Francisco.”
    I think what you mean is that nobody gets a *prescriptive* easement to views (i.e. an easement essentially by adverse possession). I’m still not seeing what the problem would be with an express easement, however.

  11. Posted by Contango

    conifer,
    I’m not an expert, just talking from experience…
    I’m not familiar with 2000 Washington or the house below it. If they have an agreement and they both choose to honor it; then it is valid but if the house below decides to sell or to apply and be approved for legal permits to construct a vertical extension that would affect the adjacent properties’ views; then I would think that whatever view easements that exist will be legally extinguished one way or another.
    I’ve known of recorded view easements that were paid for and extinguished when permits were issued for construction. SF Building codes do not protect views.
    sfrenegade,
    I think many are confusing land easements with view easements. The difference is that land owners own the land and the easements like ingress, egress, utility, rail road are attached to the land and require the land in order to exist.
    Light, air, or view are not attached and do not require the property to exist.
    Again, does a landowner own the rights for an express easement?

  12. Posted by sfrenegade

    Contango, it seems like you’re trying to make a distinction between affirmative easements and negative easements, when you refer to “land easements” vs. “view easements.” I’m not sure. A view easement can certainly be appurtenant to a parcel — it’s usually a negative easement.
    I also don’t understand why obtaining a permit would extinguish an easement written in a deed. Building codes are separate from land records. That would be like saying, “if I get a code-compliant permit to put a building on Contango’s land, then Contango automatically loses his/her claim to that land to me.”
    In any case, there is nothing wrong with an express easement. If you own a property, you can sell it with an express easement written in the deed. Can you point to case law that suggests that an express easement written in a grant deed would be unenforceable?
    California common law generally doesn’t recognize a right to a view and doesn’t allow for prescriptive view easements. However, two parties can contract for a view easement, and there are some local ordinances that do grant view easements. Those ordinances must be evaluated on a case-by-case basis because each one is different.

  13. Posted by Denis

    I think it’s interesting to contrast this place with 135 Locust. Similar in size and exterior appearance, the outcome of the two sales couldn’t have been more different. Sure, the Scott house location is inferior, but I’m wondering if the owners had spent a little bit of money fixing this place, they could’ve mitigated their loss somewhat.

  14. Posted by Contango

    sfrenegade,
    “Contango, it seems like you’re trying to make a distinction between affirmative easements and negative easements, when you refer to “land easements” vs. “view easements.” I’m not sure. A view easement can certainly be appurtenant to a parcel — it’s usually a negative easement.”
    Nope, I’m just trying to say that land easements are valid and legally transfer with title whereas view easements in SF are questionable. Property Owners exclusively in the City of San Francisco do not have any legal rights to a view. The City of San Francisco has No View Ordinance. So how can one sell something as appurtenant to a parcel that they do not rightfully own and is not permanently attached to the parcel, and expect it to legally transfer with title?
    “I also don’t understand why obtaining a permit would extinguish an easement written in a deed. Building codes are separate from land records. That would be like saying, “if I get a code-compliant permit to put a building on Contango’s land, then Contango automatically loses his/her claim to that land to me.”
    It means that a building is going up that will block views regardless of Contango’s view easement.
    I was just projecting since most problems of this nature become serious due to building permits. Somebody will sue, either the permit holder to extinguish the view easement or the adjacent property that claims to be beneficiary of the view easement. After a fast run up in legal bills, most likely, a settlement will be reached where the permitted project prevails and the view easement is extinguished or void.
    “In any case, there is nothing wrong with an express easement. If you own a property, you can sell it with an express easement written in the deed. Can you point to case law that suggests that an express easement written in a grant deed would be unenforceable?”
    An express easement written in a deed that is determined invalid, unauthorized, granted by misrepresentation, negligence etc. would be null, void, & unenforceable.
    “California common law generally doesn’t recognize a right to a view and doesn’t allow for prescriptive view easements. However, two parties can contract for a view easement, and there are some local ordinances that do grant view easements. Those ordinances must be evaluated on a case-by-case basis because each one is different.”
    “two parties can contract for a view easement”
    I agree, property owners can have private agreements and as long as they honor their agreement, it is valid but that is not an easement (deed) that legally and automatically transfers with title to real property. I remember SF code regarding lot line windows that specifically say that either party can revoke the agreement with notice. I’m only referring to the City of San Francisco where No View Ordinances exist. New York has a view ordinance. I believe existing local view ordinances like in Marin only address the cutting of trees that block views. They do not address buildings or other structures that block views.
    Here’s Zanelli v. McGrath, 166 Cal. App. 4th 615 – Cal: Court of Appeals, 1st Appellate Dist., 1st Div. 2008 with all Case Law Linked. Ironically, much of the case law referenced are traditional land easements not view easements.
    http://scholar.google.com/scholar_case?case=13664780644010623632&hl=en&as_sdt=2&as_vis=1&oi=scholarr
    Interesting that the 1981 recorded View Easement was not covered by Title Insurance which most likely means the Title Company refused to insure the recorded View Easement.
    This case is another good example of how messed up our judicial system is.

  15. Posted by Contango

    Denis,
    After an investor has lost so much on a property, the thought of spending more on it is excruciating. They just wanna get rid of it and stop the pain.

  16. Posted by EH

    Denis: Sunk-cost fallacy comes to mind. :)

  17. Posted by sfrenegade

    Contango, I’m not sure you understand real property law, especially since you seem to be muddling several concepts and not describing others correctly. The permitting and zoning process is different from land recording. In addition, just because there is no view ordinance in SF doesn’t mean that there can’t be an express easement in a deed.
    California law doesn’t say that a view easement is against public policy. If that were the case, then much of what you were saying would be true. However, California law does allow an express view easement, and that can’t be extinguished by mere permitting or by whimsy, even if it can be extinguished by the merger doctrine, which is inapplicable in this case. Zanelli does not control anything here, and in fact supports what I’m saying.

  18. Posted by eddy

    @Denis, I agree.

  19. Posted by The Milkshake of Despair

    Yes, I think that Denis’ assertion that a “little” money spent could have paid off here. I’m assuming some basic low cost refresh work, nothing that would require pulling a permit.
    Maybe the sellers expected the buyer to gut and remodel anyways ?

  20. Posted by Contango

    “Contango, I’m not sure you understand real property law, especially since you seem to be muddling several concepts and not describing others correctly. The permitting and zoning process is different from land recording. In addition, just because there is no view ordinance in SF doesn’t mean that there can’t be an express easement in a deed.”
    We are having a mercury retrograde moment. I understand what I am saying. I think our basic disagreement is having the right to deed something that I believe the grantor does not own.
    I agree that zoning and permitting are separate from land recording. However, I am adding that the permitting process governed by zoning will proceed to approve legal building permits that block views regardless of recorded view easements. This somewhat defeats the entire purpose of a view easement.
    I agree that express easements by deed are legal and at the discretion of the land owner. However, I believe that a view easement in SF under the circumstance of which we are discussing can be successfully challenged and extinguished in a court of law.
    I understand the lawful right to a view can only be granted by a local ordinance.
    “California law doesn’t say that a view easement is against public policy. If that were the case, then much of what you were saying would be true. However, California law does allow an express view easement, and that can’t be extinguished by mere permitting or by whimsy, even if it can be extinguished by the merger doctrine, which is inapplicable in this case. Zanelli does not control anything here, and in fact supports what I’m saying.”
    “California law doesn’t say that a view easement is against public policy.”
    By failing to adopt a View Ordinance, San Francisco is clearly stating that It Is Not a Matter of Public Policy.
    “even if it can be extinguished by the merger doctrine, which is inapplicable”
    In this case, it is Absolutely Applicable.
    (Kazi v. State Farm Fire & Casualty Co. (2001) 24 Cal.4th 871, 880 [103 Cal.Rptr.2d 1, 15 P.3d 223].) (3) Civil Code section 811[6] provides that a servitude is extinguished “[b]y the vesting of the right to the servitude and the right to the servient tenement in the same person.”[7] Section 805 provides: “A servitude thereon cannot be held by the owner of the servient tenement.” (4) “Section 497 of the Restatement of Property states the rule as follows: `An easement appurtenant is extinguished by unity of ownership of estates in the dominant and servient tenements to the extent to which the uses which could have been made prior to the unity by virtue of ownership of the estate in the dominant tenement can be made after the unity by virtue [of] ownership of the estate in the servient tenement.’” (Renden v. Geneva Development Corp. (1967) 253 Cal.App.2d 578, 587, fn. 7 [61 Cal.Rptr. 463] (Renden).) The rationale underlying sections 805 and 811 is “to avoid nonsensical easements—where they are without doubt unnecessary because the owner owns the estate.” (Beyer v. Tahoe Sands Resort (2005) 129 Cal.App.4th 1458, 1475 [29 Cal.Rptr.3d 561] (Beyer).)
    The View Easement at 3025 Scott Street was created and recorded while the same owner (same interest) owned both parcels which according to Case Law extinguished the View Easement when it was created making it invalid.
    (1) We affirm the judgment on the ground that the easement was extinguished by merger, and therefore will not reach the merits of the court’s alternative holding that the easement was conveyed to McGrath when Sommer failed to reserve it in the deed.
    Keep in mind that this appellate judgment only addressed that the easement was extinguished by merger and did not even address transfer of title while failing to reserve it in the deed. I think the appellate court did this intentionally so they would not open up anymore cans of worms.
    This case never even addressed that San Francisco has no view ordinance or that the grantor of the easement does not own rights to air, light, or view.
    The case did address that even though the view easement was deeded and recorded, it was not covered by tile insurance. This is important.
    The case did address that although the easement was not disclosed or recorded in the deed, the purchaser knew the easement was recorded as a lien in the preliminary title report and had the opportunity to escape the purchase agreement. This would be important for the purchaser of 3025 because he agreed to the easement but will later discover that it was invalid.
    My knowledge of the law comes from being sued all the time for things that have nothing to do with me and learning the hard way that the outcome will not always depend on law but whose lawyer is the last one standing.
    This is all just my opinion… over & out

  21. Posted by sfrenegade

    “therefore will not reach the merits of the court’s alternative holding that the easement was conveyed to McGrath when Sommer failed to reserve it in the deed.”
    This is the operative point. If Sommer had reserved the view easement in the deed, this case would have never gone to court because Sommer would have won. You can definitely reserve an easement by putting it in the deed.
    No offense, but you don’t really understand the law here and it’s not clear that you understand the appropriate legal terms here either. Permitting cannot override an easement.

  22. Posted by lawdood

    I am a lawyer – but not a real estate lawyer – and my entire knowledge of this matter comes from quickly skimming the Zanelli case Contango posted. Contango, your reasoning appears confused.
    Extinguishment only occurs if the easement exists prior to merger (when the two adjoining properties are separately owned). Then, when an owner of one property purchases the adjoining parcel the easement is extinguished (which serves the purpose of “avoid[ing] nonsensical easements”).
    The Zanelli court did not hold that the merger doctrine bars property owners from selling an adjoining parcel with an easement they create and properly recorded. Your conclusion that it does is not logical and is not supported in the caselaw.
    Absolutely nothing in the law forbids creating an easement when you own adjoining properties – in fact Zanelli indicates that the property could have been sold with the view easement. Indeed, the view easement did not run with the property because the owners didn’t properly record it and did not advertise that the property would be sold with a view easement, not because view easements are invalid/unenforceable.
    The discussion you cite from Zanelli would be unnecessary if view easements are not enforceable (all the court would have had to say was: view easements do not exist/are not enforceable, so it can’t be enforced, end of case). Since it didn’t say that, we can safely conclude that view easements are binding if properly executed.
    A couple of other items:
    Contango said: “By failing to adopt a View Ordinance, San Francisco is clearly stating that It Is Not a Matter of Public Policy.”
    Not sure what you mean here, but the absence of a view ordinance means nothing: it neither creates nor extinguishes a right and does not bar parties from entering in to binding agreements or creating easements that run with a property.
    Contango said: “This case [Zanelli] never even addressed that San Francisco has no view ordinance or that the grantor of the easement does not own rights to air, light, or view.”
    That’s because those considerations are irrelevant. If properly recorded and conspicuously advertised, the view easement can run with the land.
    An owner might not own air or a view, but as far as I know he can sell the right to build a structure on his land over a certain height/footprint. I’m not sure why you think otherwise (as you haven’t pointed to any actual prohibitions on the practice). But I’m happy to be proven wrong – I just haven’t seen it in what you’ve posted.

  23. Posted by sfrenegade

    “The discussion you cite from Zanelli would be unnecessary if view easements are not enforceable (all the court would have had to say was: view easements do not exist/are not enforceable, so it can’t be enforced, end of case). Since it didn’t say that, we can safely conclude that view easements are binding if properly executed.”
    lawdood is making the same point I was here. The Zanelli decision specifically allows for the fact that the seller could have stated the easement in the grant deed. The whole reason Zanelli was in court was because the seller didn’t state the easement in the grant deed.
    The fundamental problem here is that Contango doesn’t understand the facts of the case and the sequence of events. In the Zanelli case, there once was an easement on Property B that protected the view of Property A. Then, the owner of Property A bought Property B. At that point, the easement was extinguished through merger because the same person owned Property A and Property B, and the law logically assumes that the easement is no longer needed. The owner then later resold Property B without re-stating the easement in the new grant deed. Therefore, the easement was never recreated after being extinguished by merger.
    In this case, Property B (aka 3025 Scott) did not have an easement to start off. When the owner of Property A sold Property B, the owner of Property A likely put the view easement into the deed for Property B. If that’s the case, this easement was created at the time of sale and is a valid express easement. Merger does not apply. Permitting doesn’t matter. The lack of view ordinance doesn’t matter.

  24. Posted by tc_sf

    If these air rights have any economic value would they not count in CA as taxable real property?
    i.e. If the dominant estate actually gained anything of economic value by obtaining a negative easement wouldn’t this show up as an increase in tax assessed value?

  25. Posted by sfrenegade

    tc_sf, they should, but I doubt the assessor’s office is that savvy. It is also hard to assess this value, but not impossible.

  26. Posted by Contango

    sfrenegade,
    For the last time Permitting does not override a view easement. From experience, permitting does not consider the view easement in the permit process. It considers it to be a civil matter. In order to stop the permit and building process that will block your view, you will need a court injunction.
    “If Sommer had reserved the view easement in the deed, this case would have never gone to court because Sommer would have won. You can definitely reserve an easement by putting it in the deed.”
    From experience, this is also false. I own properties with all kind of easements. I have never seen an easement recorded on my deeds. The easements only appear on the title report and the title company insures title. Title reports also have made errors and omissions that are later corrected. Regardless, at ALL times, the easements on my properties and easements that my properties own have always been valid, some dating back 80+ years, long before I was born or owned the properties.
    If you say that this view easement runs with the land and transfers with title then why would Sommer have to reserve it?
    Sommer acknowledged that the view easement was listed as a lien in the preliminary title report but that it was not insured. Perhaps the Title company refused to insure title if the view easement was on the deed?
    We are arguing about things that are merely our opinion. You can record anything you want but it doesn’t make it valid and it can always be challenged.
    lawdood,
    You are referring to extinguishment in the Zanelli case. I am talking about having the Scott Street view easement extinguished.
    Since my first post, I am saying that the seller of 3025 Scott Street created and recorded the view easement when he was both dominant and servient. Then the seller sold the servient property. The creation of the view easement in this case is illegal, therefore invalid and unenforceable because:
    805. A servitude thereon cannot be held by the owner of the servient tenement.
    And therefore the view easement must be extinguished.
    Here is the referenced California Civil Codes in the Zanelli case that apply to the Scott Street case.
    803. The land to which an easement is attached is called the dominant tenement; the land upon which a burden or servitude is laid is called the servient tenement.
    804. A servitude can be created only by one who has a vested estate in the servient tenement.
    805. A servitude thereon cannot be held by the owner of the servient tenement.
    The rationale underlying sections 805 and 811 is “to avoid nonsensical easements—where they are without doubt unnecessary because the owner owns the estate.” (Beyer v. Tahoe Sands Resort (2005) 129 Cal.App.4th 1458, 1475 [29 Cal.Rptr.3d 561] (Beyer).)
    811 is irrelevant here. No merger is required in the Scott Street Case. The easement was created and recorded in error and not in compliance with California Civil Code 805.
    You are misinterpreting much of what I said.
    “Contango said: “By failing to adopt a View Ordinance, San Francisco is clearly stating that It Is Not a Matter of Public Policy.”
    “Not sure what you mean here, but the absence of a view ordinance means nothing: it neither creates nor extinguishes a right and does not bar parties from entering in to binding agreements or creating easements that run with a property.”
    The absence of a view ordinance means that all San Francisco Homeowners have no legal rights to views. Now, if we have no legal rights to views (which is echoed by SF Building codes), then how are we able to sell view easements that run with property forever even after we no longer own the property?
    “Contango said: “This case [Zanelli] never even addressed that San Francisco has no view ordinance or that the grantor of the easement does not own rights to air, light, or view.”
    That’s because those considerations are irrelevant. If properly recorded and conspicuously advertised, the view easement can run with the land.”
    If it was only a matter of error in recording then the deed would have just been re-recorded to correct the error and they would not have lost their easement. Easements are seldom advertised, they appear on the title report.
    “An owner might not own air or a view, but as far as I know he can sell the right to build a structure on his land over a certain height/footprint.”
    Yes, an owner can sell the right to build on his land but the problem here is the owner is no longer owner of the property and is denying the right of the new owner to build as he pleases on his property of which he is legally entitled.
    Since you are a lawyer, can you go into westlaw and find us Case Law regarding San Francisco View Easements because this is the only case law I can find.
    The case law used in Zanelli was all pertaining to land easements and none regarding view easements when they are clearly not the same.
    It’s all opinion and anything can happen in the courtroom but the Scott Street Case will be an interesting one to watch unfold and perhaps set some remarkable new precedence.

  27. Posted by Contango

    hey sfrenegade,
    Did you read the caption by Socketsite under the photo at the top of this page about the background of this property???
    tc_sf,
    that is a great question

  28. Posted by lawdood

    Contango, I would be repeating myself by pointing out the numerous matters on which we disagree.
    I will just say this: If you position was correct, Zanelli would have been decided on those grounds and the court would have said so. It did not, because nothing prohibits an owner of two adjoining parcels from creating and recording and easement, then selling one property subject to that easement.
    If you are right, why doesn’t Zanelli say so?

  29. Posted by sfrenegade

    “From experience, this is also false. I own properties with all kind of easements. I have never seen an easement recorded on my deeds. The easements only appear on the title report and the title company insures title. Title reports also have made errors and omissions that are later corrected. Regardless, at ALL times, the easements on my properties and easements that my properties own have always been valid, some dating back 80+ years, long before I was born or owned the properties.
    If you say that this view easement runs with the land and transfers with title then why would Sommer have to reserve it?”
    You don’t understand the law here, once again. Let me make this more simple for you. In Zanelli, the easement was created before merger, so it gets extinguished. For 3025 Scott, the easement was created after merger, so it stands. It’s really that simple.
    Your property was apparently not subject to merger like Sommer’s property was, so the easement didn’t need to be stated in your deed. AFTER merger, an easement needs to be restated in the deed.
    “The absence of a view ordinance means that all San Francisco Homeowners have no legal rights to views.”
    No, that’s not true. :) Sorry, you don’t understand easements or the law. An absence of an ordinance does not mean you cannot have legal right to a view.
    “We are arguing about things that are merely our opinion.”
    No, you are arguing your opinion and are completely wrong. I am discussing what the law is and what the law means.

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