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Orange County Legal Blog

Paying attention to contract language could help developers

Before a new project can begin, the construction contract needs to be negotiated. When California developers sit down with the people who will make their dreams a reality, paying attention to the language could prove useful. It could help keep the project from going over budget.

Having some control over labor costs is a good place to start. Developers could require any labor costs not previously approved to go through them. This is one place where costs can easily get out of control. Retaining some oversight when it comes to the cost of labor may help keep that from happening.

What happens when a landlord breaches a lease agreement?

Not all rental relationships work out as intended. In a perfect world, each party will fulfill his or her obligations under the lease, but that does not always happen. When an Orange County commercial tenant believes that a landlord has breached the lease, gaining an understanding of the legal options available becomes a priority.

The first place to look is to the lease. What does it say about the landlord's obligations to the tenant? What provision or provisions specifically were breached?

Starting a development involves a variety of steps

Deciding to get into the California's real estate game could be the easiest decision you make. As you embark on a new development, you will need to go through numerous steps before you can even break ground on the construction. Of course, there always seem to be other issues to address as the project moves forward as well.

Nearly every development starts out the same way -- finding the right location. Thereafter, real estate contracts, title matters, zoning issues and more require your attention before the land becomes yours. Unless you have unlimited funds, you will also need to procure financing, which often leads to another set of requirements from the lender.

What must you agree to in a franchise?

If you want to start a business, there are likely many things you will want to consider. How much money do you have available for your enterprise? What kind of risk are you willing to accept? And are you open to the possibility of franchising?

While you might have numerous business concepts in mind, sometimes becoming a franchisee is the best route to take to entrepreneurship. A tested business model built on consistency could pave your way to success. And while becoming a franchisee may reduce some of your initial risk, you will probably want to make sure you fully understand the terms of your agreement.

A landlord needs to handle CAMs carefully

Renting space in shopping centers can be a lucrative business. Part of the rental process is passing on common area maintenance costs. An Orange County entrepreneur looking to become a landlord to retail establishments and restaurants needs to understand what CAMs entail and know how to handle them so as not to make things overly complicated.

CAMs are one thing that commercial tenants tend to pay attention to when negotiating a lease. As a landlord, an Orange County property owner should make sure that each tenant understands his or her obligations in this area. It could also help to keep track of what each tenant owes, along with the expenses. Documentation helps provide a paper trail for tenants and makes sure that no expenses to be included are missed.

California developers may be watching Senate Bill 330

Many California communities have limitations on what construction projects can happen in their areas. This is true despite a housing crisis here in the state. Recently, state Senator Nancy Skinner introduced a bill that would force these communities to lighten up on their restrictions, which could benefit developers.

If the bill is enacted into law, it would allow developers to build in areas they currently cannot. The number of homes in an area could increase. In addition, Senate Bill 330 would limit an approval process that is currently arduous in some areas.

Knowing some commercial lease vocabulary helps with negotiations

When it comes to renting property for a business here in Orange County or elsewhere, tenants have more freedom to negotiate terms with the owner of the property than in residential situations. This provides more flexibility and the opportunity to receive better terms. Before sitting down to talk terms with a potential landlord, it would be useful to understand the vocabulary associated with a commercial lease.

It is not difficult to figure out terminology such as lessor and lessee, but not as many first time commercial tenants understand the different types of leases a property owner could present to them. For example, CAMs are commonly included in commercial leases. CAM stands for "common area maintenance" needed in order to keep the whole building running smoothly, clean and in good working order. Commercial tenants usually pay a portion of these costs, which are often negotiable.

Is the mixed-use development here to stay?

In decades past, it seems as though people across the country, including here in California, wanted to keep the different parts of their lives separate. They wanted to live on one area, shop in another and entertain themselves in yet another area. In recent years, that trend has changed, and the mixed-use development may be here to stay.

These days, people tend to want to live, work, shop and entertain themselves within a relatively small area. The ability to walk to the grocery store, see a movie and return home appeals to many people. Those in the development and retail industries took note of this desire and began creating more of these areas to meet the demand.

A commercial tenant shouldn't hesitate to check out a landlord

When looking for a space in which to operate a business, a California entrepreneur expects property owners to check him or her out. Background checks that include criminal, rental and financial histories are fairly commonplace these days. What a commercial tenant may not realize is that he or she can also check out the landlord to make sure that renting from a particular property owner would be a good fit.

A potential tenant does not have to give in to unreasonable lease terms or "strong arm" tactics by property owners. He or she needs to be willing to walk away since a landlord attempting to close a deal too quickly could hide problems. Perhaps the property owner does not have the money to maintain or repair the property.

Some question future development in California wildfire areas

As anyone who has lived here in California for any length of time knows, wildfires could devastate many of the state's residential communities. In the aftermath of recent fires here in the state, some wonder why future development projects are given the green light by government officials. They argue that it's foolhardy to put that many people and homes at risk.

At least one study indicates that California's wildfires are burning faster and hotter than in years past. They spread farther and are more difficult to predict. With these dangers, questions are being raised regarding the wisdom of continued building in areas where wildfires are more prevalent.