This summer has been hot, dry and pretty predictable. Good time for some pondering. We certainly get a wake up call when work picks up in late August after vacations burn off and folks head back into their routines. This weeks’ stock market tumble got everybody’s attention right away as well. Having time to think often leads to contemplation on how to better and more creatively craft and interpret these creatures known as leases and contracts. Before diving back into specific topics, I wanted to share some nuggets of wisdom – you decide whether it’s wisdom or not for yourself – as well as some thoughts for the rest of 2015 that may be helpful.
Too often, as attorneys, brokers, asset managers and developers, folks get stuck in reflexive methods of putting together leases and contracts dealing with real estate. Yes it’s trite to say let’s “think out-of-the-box” (I hope that’s my last buzz word in this post) but it’s really the only way to move forward and be effective at what you do. There also some very bad habits that can be developed that although they might get the job done, end up creating situations where there are no real winners, a landscape of unforeseen circumstances and unexpected costs and delays.
Here are just a few:
Although most states allow garnishment of wages for final civil judgments of many types, North Carolina has been cautious (some would “stingy,” while others would say “prudent”) in limiting garnishment of disposable income wages for limited purposes such as taxes, student loans, child support, alimony and payment of ambulance services in certain counties. Recently however, the North Carolina Legislature has moved more aggressively to expand this remedy to include final judgments involving any “monetary damages.” But not without a number of limitations, exceptions and procedural hurdles for creditors. The current status of the Bill is referral to the Senate’s Committee on Rules and Regulations (as March 30, 2015).
The current “state of disunion” in the US by state looks like this: Continue reading
How many times have you or your company looked back at a transaction and winced at some of the expenses and fees paid to close the deal? Wondered aloud whether the performance of your team and associated vendors and other professionals was properly analyzed and carried out? Thought about how the deal could have been structured more efficiently and each step discussed more thoroughly?
These are just some of the questions commercial real estate professionals struggle with as they try to become more productive, efficient and profitable. As with any business transaction there is no magic answer or manual for how to get the most out of every project while controlling costs and staying true to the goals originally set for the sale, purchase, lease or other transfer of real estate interests. However, these issues arise in every economic cycle, transaction and business regardless of the circumstances.
This will be the first in a series of posts analyzing how real estate companies and related businesses can work together to achieve the goals for each project, while controlling costs and maximizing results. This week we focus on the front end ideas, goals, initial planning and lining up the team to best work on the deal. Continue reading
Just as we have previously reviewed and analyzed the differences between certain aspects of sharing property rights, landlords and owners are often met with the challenge of whether to enter into lease or a license agreements when allowing businesses or individuals to use their real property. Although these contractual arrangements resemble each other in many structural ways, they have important legal and practical differences that should be considered before choosing one path or the other. Read on for five important differences… Continue reading
No one wants too much or too little. But where is the Goldilocks’ solution? Err on the side of too much rather than too little? Stick to the amount determined by local business standards? Somewhere in the middle? Enough to get the deal the deal done? Hmmmmmm….
In order to analyze this situation, let’s imagine subpoenas were issued for a representative of each of following players in a lease negotiation to given confidential testimony on this question, including their overriding goals. Each representative is given pure anonymity and the prompt to be as forthright and open as possible. The investigator interviews each person and then reviews his notes. A clear answer does not appear. Rubbing his eyes, he looks at the testimony again: Continue reading
Yes, this seems strange doesn’t it.
However, the North Carolina Supreme Court has determined this can be the result in certain circumstances. In Eastern Carolina Regional Authority v. Lofton (No. COAA14-212), the N.C. Supreme Court found that in an eviction case based upon criminal activity of the tenant’s guest, the tenant could not be evicted because it was her involvement in the basis for the eviction would be “shockingly unfair of unjust” or “excessive” and “unreasonable.” One could easily argue this was limited to the residential nature of the case (domicile), but the N.C. Supreme Court based its ruling on the basic four criteria that serve as a basis for ALL evictions, commercial or residential. Continue reading
When is it a good idea to keep working with a defaulting tenant?
How many times (even during a robust market) have landlords considered and perhaps acted on a tenant’s request to grant them abatement, deferrals and other concessions in order to preserve the relationship, avoid vacancy, make their lender happy and keep the rent coming in? More often than you might imagine.
Although there is clearly self-interests on both sides in the decision to allow the tenant to pay partial rent or defer overdue amounts under the lease, often landlords and tenants enter into such discussions with the best intentions for all involved.
Yet, even the most benevolent agreements can lead to negative consequences down the road. Continue reading
Let’s face it. In the post recession market, Developers and Owners are ready to look for opportunities to build, expand, alter and modify their properties. Although likely not as robustly as to pre-2008, there is retail, office and industrial re-development and expansion happening as we read these words. And with this change in the market comes an inevitable challenge between Landlords and Tenants as to their rights and obligations as new development moves forward and existing product is modified, altered and expanded. The focus of this post is to delve into the issues relating to what these parties should discuss, plan for, and work through during the growing pains. One of the struggles is to determine the rights and responsibilities of the owner and the tenant when a dormant or unimproved property experiences growth and (yikes!) prosperity. As reflected below, change may not ultimately be a problem for either party. Although there is a lot of advice for tenants, landlords can certainly benefit from this discussion. Continue reading
It’s that season again. The owner and vendor costs have been received. Next, time to work through the Common Area Maintenance (CAM) costs, calculate allocations, send notices and so on…. What are 10 things that owners/property managers and tenants should remember and act on? Continue reading
2015 is here and the real estate market is back! Or is it? The beginning of the year is always a good time for reflection and planning for what may lie ahead for retail, industrial, office and multifamily properties; lending; the economy; construction; investment; and development. Here are some thoughts on what 2015 could look like. My local lens is Charlotte N.C., but I would be interested in feedback from others areas of the country as well.
Certainly this list is not scientific or the result of past reflection on future time travel, so weigh in! Continue reading