Real Property1 
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Re: “Bust in Sunny Brae

The invasion of the Lost Paradise property , crudely called BuddhaVille, is the most recent example of the governments new strategy of prosecuting property owners.
The federal government has been using the RAVE Act USSC 856 to prosecute many property owners in California. You can find information about the RAVE act at the following sites:

http://en.wikipedia.org/wiki/RAVE_Act
http://bbsnews.net/bw2003-06-12.html

The theme of most federal prosecutions in this regard is to charge a defendant with conspiracy and 856 (RAVE ACT). Conspiracy is governed by mandatory minimum sentencing. If you are convicted in a conspiracy with over 100 marijuana plants you will be sentenced to five years, in a conspiracy with over 1000 plants you will be sentenced to ten years. Unfortunately the judge and jury have no discretion over your sentencing in a mandatory minimum case. Most defendants when facing mandatory minimums decide to plead guilty rather than face an uncertain outcome in court which could lead to lengthy prison terms. When pleading the government typically agrees to reduce the sentence to a non mandatory minimum charge; the RAVE Act USSC 856 is a non mandatory minimum charge. What is important to note is that the federal government indicts using charges that will lead to a guilty plea, the longer the sentence the more likely a defendant pleads guilty (whether or not they are actually innocent).

Recently the government has been focused on targeting real property owners in order to put a dent in marijuana crime. Unfortunately this is quite effective because a property owner has both their freedom and their finances to lose. You can read more at the following sites:

http://www.canorml.org/news/LA_DEAletter.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/07/BAE4UTGBG.DTL

Humboldt County has a major housing shortage. There is very little land available for new families to homestead. This shortage combined with a difficult regulatory environment has led to property owners using other forms of ownership. The same thing has been happening for sometime in San Francisco and the people have responded by creatively following the law so that they can have a form of home ownership. The following website explains a lot about California models of co-ownership:

http://www.andysirkin.com/Index.cfm

Equity or ownership co-operatives are an effective form of land ownership. Their organizational framework is usually established by the developer of each project and its lawyers.

Co-owners have been called something more than a tenant , and something less than an owner. Typically, a corporation owns the property, and each purchaser receives a share in the corporation, together with a non exclusive long-term right to use in one particular area. That right is usually documented by an "occupancy agreement."

One can investigate what form of co ownership "Lost Paradise" is using the following website:

http://kepler.sos.ca.gov/corpdata/ShowAllList?QueryCorpNumber=C2581198&printer=yes

Contrary to reports, Lost Paradise is not an LLC, it is a corporation. A corporation is not the best current model of ownership for real estate. In fact most real estate investors use LLC's because of the favorable tax regulations that corporations do not enjoy.

A corporation in Humboldt that owns land in the same way as Lost Paradise is: The Big Lagoon Park Corporation. The Big Lagoon Park Corporation has enabled the co ownership of approximately 50 acres of land with 76 shareholders on the coast just north of trinidad for over fifty years. The Board of Directors has done a great job in helping to make sure that this corporation runs efficiently through proper by-laws and governance.

It is important to note that just because you are a shareholder of a corporation that may be involved in illegal acts, you are not necessarily responsible for the corporations actions. The Enron case is a great example of this. It would be a shame if the federal government used 450 agents to investigate shareholders of the Lost Paradise corporation solely because they were owners. All of the shareholders of Enron were not investigated.

There are many working models of co ownership through out Humboldt and California. It is unlikely that the reason for this attack on civil liberties was because of the manner in which title to the property was held. More likely is that the federal government is all about seizing assets. Real estate owners typically have very visible non liquid assets that are easy to take and assess. Real estate owners are usually the most political for this reason: government is constantly stealing from them. Property owners in Humboldt county should be outraged at this recent invasion and should be worried about what is next. Will we see an increase in civil forfeiture like we saw in the late 80's?

Posted by Real Property on 06/29/2008 at 10:08 AM

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