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Orange County Legal Blog

Developers may consider using mediation for real estate disputes

Not every project goes smoothly. Orange County developers could encounter obstacles to the completion of their projects due to some sort of dispute. While the knee jerk reaction may be to file a lawsuit, the situation may be better handled through the use of mediation.

Unless there are complex legal issues surrounding the property or allegations of criminal conduct, keeping the matter out of court could be the most advantageous way to move forward. More than likely, the parties involved need to try to maintain some form of working relationship, and doing so would probably have a greater chance through mediation than litigation. For this reason, choosing mediation could prove useful.

Don't forget how a development can affect traffic in the area

Anyone who has lived here in Orange County for any length of time knows that the traffic can be heavy and chaotic. Bumper-to-bumper travel is more the norm than anyone would ever like to admit. When planning a new development in the area, how it will affect already congested traffic patterns is often one obstacle that requires addressing before moving forward.

One California city recently had to scrutinize how a potential new development would affect the traffic in the area. The plan is to demolish a closed Denny's restaurant and build a multi-tenant, single story building in its place. Doing so would presumably increase the traffic in the area. The conversation about this topic alone took hours before the planning commission authorized the developer to move forward.

The difference between a commercial and residential development

When Orange County entrepreneurs decide to get into real estate, they may find themselves deciding between residential and commercial property. Understanding the differences between the two could help make the decision. The disparities in how such a development would be handled could affect the bottom line for these entrepreneurs.

Commercial property is most often comprised of retail establishments, restaurants and office buildings, just to name a few. Obviously, this is different from residential property, but the variations do not stop there. Commercial tenants can negotiate their leases, including tenant improvements more often than a residential tenant. Customizing the space for a particular potential tenant's needs is part of the leasing process for commercial properties but not often for residential ones.

Business lease agreements deserve close scrutiny

One of the most consequential steps in choosing a physical space for your business is negotiating a favorable lease. There are many components of a commercial lease, and a bad lease can turn a great opportunity into a business-killer.

Perhaps you've found exactly the space you want to establish your business or expand an existing business into a new market. You have looked at the area, identified the advantages and disadvantages of the location, the cost of leasing the space, and the advantages and limitations of the space itself. Even if all of these aspects are in line with your needs, a bad lease can spoil them.

Looking out for your rights in a new development

Every time you start a new venture, you take certain risks whether the project is here in Southern California or elsewhere. You may rely on the legal groundwork you laid prior to the beginning of this new development in case anything goes wrong. When something does happen, you will need to find out if the steps you took were enough to protect your rights.

Depending on your position within the development, you could experience a variety of setbacks that lead to disputes. Sometimes, simply having a conversation is enough to resolve the issue, but if it is not, then you need to determine your next step. If you are a subcontractor who is not getting paid, an owner in a dispute with a construction contractor or someone else involved in the project, a thorough review of your agreements could reveal what legal options you have.

The cost of tenant improvements could break a landlord

The cost of everything continues to rise. Most people who live in California are well aware of this fact as the cost of everything from groceries to real estate keeps going up. When it comes to owning commercial rental property, a landlord may struggle with the rising costs of construction.

Tenant improvements are often a part of commercial lease agreements here in California as they are across the country. While this may attract a certain tenant, it could end up costing more than the property owner may receive in rental payments. Construction materials and labor do not come cheap, and it appears that rents are not enough to make improvements as profitable as a landlord would like.

Making a development compliant with Title 24

In addition to taking steps to protecting the environment, the state of California also took steps to increase energy conservation. The goal of Title 24 Lighting Control Acceptance Testing is to help ensure that lights are not using energy at times when they are not needed. A new development would need to ensure it complies with this energy code.

When no one is in a building or enough natural light comes into the building, the lights should either turn off or dim to conserve energy. In order to help ensure compliance with Title 24, developers and construction contractors should review certain aspects of the project to make sure the building will be in compliance. The first step would be to review the blueprints, which ought to show the how the lights in the building will react.

A commercial lease may include a percentage of sales

Opening a retail establishment here in Orange County may entice some entrepreneurs. When they go to find a space for their new ventures, they often look to rent instead of buy. During the review of a commercial lease for a retail space, prospective tenants often check for provisions regarding paying a percentage of their sales to the property owner.

The larger stores in high-traffic malls and shopping centers often pay a percentage of their sales to their landlords. Getting a prime spot in such an environment may also mean that smaller businesses will do the same. Of course, property owners do not take a percentage of all of a store's sales each months. Instead, they only take a percentage of the sales over a certain amount.

How much will a commercial lease really cost?

When Orange County entrepreneurs begin looking for space to rent for their new ventures, they may be in for a shock. The rent includes much more than just a base amount for the space itself. When negotiating a commercial lease, it is vital to understand what the real rental amount will end up being.

Commercial leases often include much more than just a rental amount per square foot. If the space is in a larger building with other tenants, a portion of the costs of maintaining the common areas will more than likely be either a separate fee owed by the tenant or a part of the rent. A potential tenant should make sure that he or she has access to the areas the landlord expects payment for.

When you must sever ties with a franchisee

At some point in your business relationship, it may become painfully evident that it is necessary to sever your ties with a franchise owner. Whether you are the the franchisor or a shopping center owner, this can be a complex undertaking, as there are both California and federal laws governing the operation of franchises.

In other words, it might be a lot easier to evict the local mom-and-pop restaurant than it is to shut down the local In-N-Out burger joint. So, where do you start?