Corfield Feld LLPReal Estate Transaction Lawyer San Juan Capistrano | Business Litigation2024-01-23T17:32:11Zhttps://www.corfieldlaw.com/feed/atom/WordPress/wp-content/uploads/sites/1402180/2021/02/cropped-favicon-corfield-feld-32x32.jpgOn Behalf of Corfield Feld LLPhttps://www.corfieldlaw.com/?p=486412024-01-23T17:32:11Z2024-01-23T17:32:11ZWhat does lease assignment entail?
If a landlord permits lease assignment, that means they allow a tenant to negotiate with another party that may take over their lease. Lease assignment can be convenient for tenants struggling to keep their businesses open or in need of substantially different amenities.
Growing businesses might need more space, while struggling businesses might choose to close certain locations to limit operating expenses. Either scenario might prompt a lease assignment negotiation. Current commercial tenants can avoid future lease obligations by arranging to have a different business assume the lease at the property.
This arrangement can be beneficial for a landlord because they do not miss rental payments or need to market the property to new prospective tenants. However, there can be numerous challenges that arise due to lease assignment, not the least of which is having a tenant in the space that the landlord did not personally investigate.
Is lease assignment beneficial or harmful?
Depending on the scope of a landlord's operations, the duration of the lease and numerous other factors, lease assignments can either be very helpful or potentially harmful. Every landlord has unique concerns to consider when deciding whether to include a clause prohibiting or specifically permitting lease assignment by their tenants.
In some cases, including high-turnover facilities, lease assignment clauses could allow a landlord to keep a unit occupied without spending time and money marketing the space. Other times, landlords may want to maintain direct control over future tenants and collect the rent due from a tenant who attempts to vacate the premises before their lease actually ends.
Discussing concerns and organizational needs in depth with an attorney can help landlords better determine whether allowing or forbidding lease assignments might be the best approach when signing a new commercial lease.]]>On Behalf of Corfield Feld LLPhttps://www.corfieldlaw.com/?p=486102023-10-20T12:41:49Z2023-10-20T12:41:49ZZoning and commercial property use
One of the most significant impacts of zoning laws on commercial property use is determining where businesses can operate. Commercial zones are strategically placed within a city to help ensure easy customer access and promote economic growth.
Additionally, different businesses have unique needs when it comes to location and facilities. Zoning laws take this into account by segregating businesses based on their types. Retail businesses often benefit from being located in commercial zones, where they can draw in foot traffic and potential customers. Industrial zones are essential for manufacturing and warehousing businesses due to the space and infrastructure they offer. Lastly, many offices are in commercial zones, providing a professional and accessible environment for employees and clients.
Commercial zoning laws can also significantly affect property values. Commercial properties located in prime areas with favorable zoning regulations tend to have higher values. Conversely, properties in areas with restrictive zoning may have lower values. It’s also worth mentioning that zoning laws can play a vital role in maintaining the character and identity of a community. Commercial zones can keep a city bustling with economic activity.
Challenges and controversies
Meeting zoning requirements can be costly, especially if a business needs to make significant alterations to a property to comply with regulations. This can be a burden for startups and small businesses. In some cases, a business may need to seek zoning variances to deviate from established regulations. This can be a time-consuming and uncertain process.
The rigidity of zoning laws can restrict a business’s ability to adapt to changing market conditions. For instance, a restaurant might want to expand into outdoor dining, but zoning restrictions may limit this possibility. Understanding and working within the bounds of commercial zoning laws is essential to business success. That’s why it’s important to remember that a seasoned professional can provide the guidance you need to stay compliant.]]>On Behalf of Corfield Feld LLPhttps://www.corfieldlaw.com/?p=486092023-07-31T03:32:25Z2023-07-31T03:32:25ZDefine your investment goals
Determine the risk level you are comfortable with, your expected return on investment and the timeline for achieving your financial goals. Understanding your objectives will help guide your investment decisions and focus your efforts on the right properties.
Conduct thorough market research
In-depth market research is critical in identifying emerging trends, growth areas and potentially lucrative markets. Consider factors like population growth, job opportunities, infrastructure development and vacancy rates. Analyzing market data will help you make informed decisions about the location and type of commercial properties you should target.
Choose the right property type
Commercial real estate encompasses various property types, such as office buildings, retail spaces, industrial warehouses and multifamily properties. Each type has its own risk-reward profile and demand factors.
Establish a budget
Determine your budget for acquiring and managing commercial properties. This should include the down payment, ongoing operational expenses, property management costs and potential renovations or improvements. Stay within your financial capacity to avoid overleveraging and minimize risks.
Build a diverse portfolio
Investing in different property types and locations can mitigate any risks that come with market fluctuations or changes in economic conditions. A diversified portfolio can provide a more stable income stream and protect against the underperformance of a single property.
Secure financing
Commercial real estate investments often require substantial capital. Explore different financing options, such as commercial mortgages, private investors or partnerships. Negotiate favorable terms and interest rates to maximize your return on investment.
Conduct due diligence
Before finalizing any property purchase, conduct thorough due diligence. This includes property inspections, analyzing financial records, assessing tenant leases and evaluating potential risks. Understanding the property's current condition and income potential is crucial in making an informed investment decision.
Implement a property management strategy
Proper property management is essential for maintaining and maximizing the value of your commercial real estate assets. Decide whether you will manage the properties yourself or hire a reputable property management professional to handle day-to-day operations, tenant relations and property maintenance. As with any investment, some risks come with commercial rea estate, but with careful consideration and a well-thought-out strategy, you can add a rewarding and profitable item to your investment portfolio.]]>On Behalf of Corfield Feld LLPhttps://www.corfieldlaw.com/?p=484322023-05-01T23:58:32Z2023-05-01T23:58:32ZAmericans with Disabilities Act (ADA).
What is ADA compliance?
Passed in 1990, the ADA provides guidelines for accessibility in public spaces like shops, office buildings, and apartment complexes. These guidelines are also known as Title III compliance.
Many people are familiar with the ADA, such as making parking spaces and bathroom stalls easy for persons with disabilities to use.
No one running a retail establishment would willingly create barriers to access for customers. However, some aspects of accessibility are easy to overlook.
Common areas cited in Title III non-compliance lawsuits mainly relate to wheelchair access, including:
Aisles that are too narrow
Checkout counters that are too high
Lack of adequate space in bathrooms stalls and changing rooms
The minimum fine for non-compliance in California is $4,000.
Tips and suggestions for ADA compliance
California has one of the highest rates of Title III non-compliance lawsuits. Before entering into a commercial real estate contract, it's important to work with the property owner to ensure that the retail space and adjacent areas meet ADA guidelines.
For example, access for those with mobility issues is regulated through very specific measurements. Handicap parking spaces must be at least 8 feet wide and include a 5-foot access aisle on each side to accommodate vehicles with lifts and wheelchair-bound shoppers.
There must be at least 36 inches of clearance from side to side if there are indoor shopping aisles. There is an additional requirement of at least 60 inches of passing space if the aisle is more than 200 feet long.
When it's not possible to install automated doors, there must be at least a 32-inch clearance between the door face and door stop when the door is open. Checkout counters can be no higher than 38 inches tall.
Other regulations are meant to improve access for individuals with visual impairments. These include using high-contract colors on signage and adding Braille to store directories and fixtures. Website design should be easy for those with assistive devices to use.
Overlooking ADA guidelines can impact customer satisfaction and result in fines that eat into a company's bottom line. Meeting compliance helps ensure a more pleasant shopping experience for customers of all ability levels.]]>On Behalf of Corfield Feld LLPhttps://www.corfieldlaw.com/?p=484302023-02-01T01:15:43Z2023-02-01T01:15:43ZWhat are the types of commercial leases?
Although every lease is negotiable, landlords have a choice of offering five basic types when renting commercial real estate space. Each has different considerations and responsibilities for the landlord and the tenant. The five basic lease types are:
Full service/gross lease
Net lease
Triple net/NNN lease
Double net/NN lease
Single net/N lease
In a full-service lease, the landlord is responsible for paying building expenses such as maintenance fees, insurance and real estate taxes. This lease type usually results in high rental rates but is convenient for tenants who prefer to avoid becoming involved with those additional aspects. Net leases specify that the tenant pays a specific percentage of operating expenses in addition to their rent.
Triple net leases are the exact opposite of a full-service lease, as tenants must pay for all operating expenses, including utilities, maintenance fees, building insurance, and property taxes. Double net leases are similar, but the landlord pays for structural maintenance expenses. In a single net lease, tenants pay for rent and utilities along with property taxes.
What types of leases should I offer my tenants?
The type of leases offered to commercial tenants depends on the type of commercial development you own and the tenants you have. For example, if you own a shopping center, your leases for anchor stores will differ from those for smaller retail tenants. Leases for office buildings will vary entirely from commercial retail.
Leasing issues can become complex, especially when tenants demand concessions from landlords. Knowing when to give in to those demands and when to stand firm is critical to running a successful commercial real estate venture. Carefully evaluate your expenses and determine which type of lease for each tenant will be most profitable. Remember to assess each situation and tenant individually.]]>On Behalf of Corfield Feld LLPhttps://www.corfieldlaw.com/?p=484272022-10-27T19:00:06Z2022-10-27T19:00:06ZHave a reasonable budget
You probably have an idea of how much you can afford to spend on your retail space, but it's important to do your research and have a firm number in mind before you start negotiating with landlords. It's a good idea to know the market value of the space you're looking at. This way, you won't be caught off guard by their asking price and will be less likely to make impulse decisions that could end up costing you more money in the long run.
Know what you want from the lease agreement
It's important to know what kind of lease agreement you're looking for before negotiating with landlords. This means being clear about the length of the lease, the amount of square footage you need and any special features or amenities that are important to your business.
Be prepared to compromise
In most real estate transactions, there's always some give and take for the parties to come to an agreement that they are content with. For example, you could consider signing a longer lease in exchange for a lower monthly rent payment. Or, pay a higher rent if the landlord is willing to add some amenities to the space.
Get everything in writing
This is probably the most important tip when negotiating a retail lease agreement—or any kind of real estate contract. Once you and the landlord have agreed on all the terms of the deal, make sure you put everything into a written contract. Read it carefully before signing it.
Don't be afraid to walk away
If the landlord isn't budging on their terms or they're not meeting your needs, don't be afraid to walk away from the negotiation. There are other landlords out there who may be more flexible and willing to work with you. It's better to hold out for a good deal than to settle for something that's not ideal for your business.
Negotiating a retail lease agreement in California doesn't have to be difficult if you come prepared. Remember to add clauses that can protect you from things beyond your control, like force majeure or co-tenancy.]]>On Behalf of Corfield Feld LLPhttps://www.corfieldlaw.com/?p=483702022-08-18T07:28:09Z2022-08-08T21:15:24ZReal estate is currently one of the most competitive industries, including in both residential and commercial transactions. It is costly and complicated to find property in California that suits your needs while remaining in your budget, and it can be tempting to move forward as quickly as possible once you find the right option. However, proceeding too quickly may prevent you from doing your due diligence and taking every necessary step to protect your interests. One critical step in every real estate transaction is a careful review of the purchase agreement. These are complex legal contracts that can have serious implications for your financial future, and careful review should be given to all terms included in the agreement. Inadvertently agreeing to a contract that is either incomplete, inaccurate or unclear can result in legal complications, financial loss and other avoidable issues.
What should be in your contract?
Like other types of contracts, real estate purchase agreements should be custom-tailored according to the details of the individual transaction. However, there are certain basic terms that should be in every purchase agreement. These include:
Seller assist – If you want the seller of the property to pay for some or all of the closing costs, it should be clearly outlined in your purchase agreement.
Home inspection – It is possible to make the purchase of a home contingent on the completion of a home inspection and addressing any problems noted.
Fixtures – Your agreement can outline whether the seller will leave important appliances and fixtures, including the refrigerator or stove.
Financing terms – How you intend to pay for the property purchase is an important inclusion in any agreement.
Closing – The purchase agreement should also include the date on which you expect to complete the closing and conclude the transaction.
Real estate contracts are notoriously complex and difficult to read for someone who does not have any previous legal experience. It may be in your interests to seek professional guidance when drafting, reviewing or considering a purchase agreement.
Protecting your interests
The terms of your real estate purchase agreement matter. Missing terms or terms that are not in your interests have the potential to impact the transaction or your interests after the closing. When you have appropriate assistance at every step of the real estate process, it will be easier for you to avoid missteps and protect your interests. ]]>On Behalf of Corfield Feld LLPhttps://www.corfieldlaw.com/?p=483652022-08-18T07:28:15Z2022-05-10T20:54:23ZCommercial leases are complex legal agreements, and the two parties should carefully consider the terms of these contracts before signing. As the terms for these agreements typically last for months or years, it’s critical to avoid possible missteps that could cost both time and money. If you are a tenant considering a lease agreement, you will benefit from knowing what you can expect from the property owner and how to recognize potential issues.Most landlords have a lease agreement they offer to tenants, but as you would expect, these tend to be heavily skewed in the favor of the property owner. You will be negotiating previously drafted terms that may not be in your interests. Before you sign any type of contract, understanding the issues to look for and how to negotiate beneficial terms is critical to your long-term interests as a commercial tenant.
Consider these things
In your consideration of a commercial space or during the negotiations of terms, it is easy to focus on the obvious. For example, the look of the building, the location and the rent amount are all major issues you will want to take into consideration, but you will find it beneficial not to overlook the following as well:
Condition of the premises and whether it’s appropriate for your intended use
Current zoning designation and if it is suitable for your commercial needs
Adherence to laws and regulations, such as ADA compliance
Operating expenses and costs of occupying that specific space
Maintenance and repairs needed and financial responsibility for these things
Potential need for subleasing and whether the lease agreement allows it
Safety of the premises and location, and amount of security provided by landlord
These are issues that are easy to overlook, but they can lead to serious complications in the event that there is a problem at some point after signing the contract. It may help to remember to consider these details and others before agreeing to the terms of a lease.
Protecting your interests
As a commercial tenant, it is critical that the terms of your lease agreement make sense for your California company and the nature of your operations. If you have found a commercial property that will work for your business, it is prudent to seek an understanding of how you can secure beneficial terms in your lease agreement before you move forward. ]]>On Behalf of Corfield Feld LLPhttps://www.corfieldlaw.com/?p=483642022-08-18T07:28:22Z2022-02-10T21:49:58ZBuying a franchise is a way for one to jump into entrepreneurship without the need to develop a new product or service. By purchasing a franchise, you will have access to a proven business plan and model, as well as operating instructions that lay the foundation for your long-term success. For many hoping to work for themselves, franchising is a reasonable way to accomplish this goal, but there are also various legal and financial matters to consider first.Like owning any other type of business in California, there are specific challenges associated with owning a franchise. Before you make any major decisions that could impact your long-term interests, it will be helpful to weigh the potential benefits as well as the possible drawbacks that you may face with this choice. Protecting your long-term interests starts with arming yourself with as much information and knowledge as possible before you proceed.
Important facts about franchise ownership
Franchise ownership may be a prudent choice for your specific situation, but there are certain things you may want to consider before you move forward with a significant financial commitment. Important facts for potential franchise owners include the following:
You may not have complete autonomy over how the business operates, and you may have to follow a set of established operational procedures.
Even with the name recognition associated with a franchise, you may have serious competition that affects your success.
Franchise contracts can be complex and confusing, potentially exposing you future risks.
The amount of support you get from the business after purchasing a franchise can vary.
After an initial financial investment, you may continue to owe the company regular payments for as long as you own the franchise for the right to use the name.
The control measures, specific requirements for franchise operators and financial obligations differ, depending on the individual franchise you are considering for purchase.
The best choice for your future
Buying a franchise can be a great choice for your specific business-ownership goals. If you are considering this step, it is prudent to first do your research. Not only will you need to consider the possible financial costs associated with buying a franchise, but you will also want to consider the legal requirements as well. By doing your due diligence at the start, you will be less likely to face exposure to financial loss and other risks.]]>On Behalf of Corfield Feld LLPhttps://www.corfieldlaw.com/?p=483602022-08-18T07:28:26Z2022-01-19T21:59:21ZIt can be extremely difficult to locate a commercial property that suits the operational needs of your business while staying within your budget. Once you find a location, you may feel a sense of urgency to move forward as soon as possible, but there are specific reasons why you may benefit from first taking specific things into consideration. Those entering a commercial lease would be wise to ensure the protection of their long-term interests.Failure to do your due diligence before signing a commercial lease may expose you to financial loss and other complications. It is in your interests to do your research and negotiate terms that will allow you to feel confident about your lease agreement going forward. There is a lot at stake, but your efforts may reduce the potential for costly disputes regarding the terms of the lease.
Important questions you should ask
As the tenant of a commercial property, you will have certain obligations to your landlord, such as paying your rent on time and caring for the property according to the terms of the lease. The landlord has certain obligations to you as well. In order to make this critical relationship work well, it is necessary for both parties to have a clear understanding of all rights and responsibilities. The following questions may be helpful:
Who is responsible for maintenance of the property? Which party is responsible for upkeep of common areas?
If the building needs major structural repairs, which party is responsible for hiring and paying for a contractor?
Under what circumstances can a landlord choose to terminate the lease? What will happen if you break the lease early?
Can you sublease the commercial building if you need to vacate the property for any reason?
Is there an arbitration clause or terms that outline dispute resolution in case there is a problem?
In negotiations, you may find that these questions help you seek terms that will provide the protection you need to move forward with confidence. While a California landlord may have a pre-written agreement, you have the right to ask questions, ask for specific provisions and take steps to ensure you are not taking undue risks. Before you sign on the dotted line, it will be helpful to understand your rights as a party in a commercial lease.]]>