Attorneys are often engaged to advise a party to a commercial real estate loan on certain key issues that are neither purely business issues nor purely legal issues. The following is a summary of some of those key issues. Borrowing Entity. Most borrowers hold title to property in an entity formed specifically for that purpose, […]
A contract involves an offer by one party and an acceptance of that offer by another party, and most commercial contracts involve multiple offers and acceptances. Another contract element requires the parties to agree to the terms and conditions of the offers and acceptances, typically by a written agreement signed by both parties. However […]
One of the more controversial and confusing elements of a commercial lease negotiation involves the allocation of responsibility for negligence of landlord and tenant. Frequently, after careful allocation of responsibility to insure the property, the parties either inadvertently undermine that allocation by their treatment of responsibility to indemnify or at least waste time (and attorneys’ […]
On June 6, 1978 voters in California approved an amendment to the State Constitution to limit reassessments of property for property tax purposes to situations involving a change of ownership. California Revenue & Taxation Code §60 defines a change of ownership as “a transfer of a present interest in real property, including the beneficial use […]
Celebrated nationwide as a taxpayer revolution when adopted, California’s Proposition 13 changed the nature of the state’s revenues and resulted in lower property taxes for properties held long-term. The initial idea was to protect taxpayers against artificially inflated assessments and even, in some cases, to protect against assessment at the true value. Many voters sympathized […]
The standard American Industrial Real Estate Association multi-tenant commercial lease form, at Paragraph 2, contains certain express representations by the lessor regarding the condition of the Leased Premises. Included are the representation that the operating systems will be in “good operating condition” on the commencement of the Lease. Additionally, the lessor represents that structural elements […]
This article contains a brief summary of remedies available to a commercial landlord upon a tenant’s default in payment or performance obligations under a lease. Upon a tenant’s material lease default, with proper notice, a commercial landlord can terminate the lease. The failure to pay rent or perform other financial obligations will ordinarily entitle a […]
Consistent with the public policy favoring free alienability of property, absent any restrictions in a commercial lease, the tenant is free to assign its interest to a third party, or to sublease all or any portion of the leased premises. An assignment transfers all of tenant’s rights under the lease for the remainder of the […]
Most property owners in California are generally aware that Proposition 65 and certain other statutory schemes impose notice requirements on Landlord where conditions on their properties result in exposure by individuals hazardous materials or to chemicals identified by the State of California as known to cause cancer or reproductive toxicity. For example, if a building […]
A lease is both a contract and a conveyance of property. As a general rule, contract law provides the parties with wide latitude to customize their respective rights and duties under their mutual agreement. The California legislature, enacting §1995.270 of the Civil Code, expressly acknowledged the strong public policy “to enable and facilitate freedom of […]