There are many examples in California case law, and they generally do not favor the party who claimed that a commercial real estate “agreement to agree” was not enforceable because the parties could not agree.  For example, the California Court of Appeal in San Diego has noted with approval the authority of a jury to determine a “reasonable rental rate” for a commercial lease renewal where the landlord has not “negotiated in good faith” for a “reasonable” amount with the lessee of the commercial premises.  Similarly, the California Court of Appeal in Los Angeles has held that a “letter of intent” setting out the general terms for the purchase and sale of an ice-cream manufacturing plant is an enforceable “contract to negotiate an agreement” that required good-faith negotiation. The court determined that the amount of damages that can be awarded for one party’s “failure to negotiate a contract” is the amount lost by the other party who has detrimentally relied on the letter of intent.

Even more troubling, the federal Ninth Circuit Court of Appeals in California recently held that a signed “Final Proposal” that was missing a material term – the length of a ground lease – nonetheless created an enforceable ground lease with a put and call option to purchase.  The court upheld a $15.9 million award for the landlord’s lost rent for a lease term that was decided upon by the jury based on all the evidence, and for the loss of the value of the put option, even though the parties had been unable to agree on all the terms of the final agreement.

The bottom line:  when you are negotiating a commercial real estate contract in California, never sign any document – even a proposal, a letter of intent, or a current lease calling for future negotiations – unless the document also provides that either party can change its mind for any reason, and refuse to negotiate or exercise good faith to reach an agreement on any material term of a future contract, without further liability for any damages, including damages for detrimental reliance.

Call San Diego Law Firm for all Help with Commercial Real Estate Transactions

Before you negotiate or sign any commercial real estate agreement, contact the skilled business real estate lawyers of San Diego Law Firm.  We have many years of experience in negotiating and documenting all types of commercial real estate contracts, and have successfully represented many businesses in negotiating contracts to buy, sell, purchase, lease, build out, and develop commercial property.  We can help you and your business as well.  Please call San Diego Law Firm at (619) 794-0243 to schedule a consultation. We look forward to helping you.

Even if the zoning of an area seems obvious (e.g. commercial, residential, industrial, or agricultural), San Diego and other cities often add many more detailed restrictions to each zoned area to control how various pieces of property are used.  Whether you’re building, renovating, buying, or selling real estate, if you don’t have the relevant zoning ordinances researched and analyzed by a competent attorney, you may be setting yourself up for a very costly mistake. 

If it turns out that there’s a conflict between your plans and the applicable zoning laws, there are different options to consider.  Individuals or the government can try to change the zoning laws covering the property, but this requires public hearings and other procedures that may be unnecessary.  Instead, if the change you need is reasonable for the area, a lawyer can apply for a zoning variance for you.  By getting a variance permit, you’re able to use the property differently from what the zoning law requires.  In some circumstances – such as a sudden change in zoning laws that cause your property to be in violation – a “non-conforming use permit,” or other type of permit, or even other type of legal action – may be required.  At San Diego Law Firm, we can determine the zoning and other use restrictions on your property, recommend any type variance, permit, or legal action needed for you to get the most value from your property, and take action to obtain whatever variance, permit, or other legal relief you need. 

Whether you’re a homeowner or developer, we understand the challenges that land use laws can pose to your financial investment.  Meet with San Diego Law Firm’s knowledgeable residential and commercial real estate attorneys for help in obtaining zoning permits and variances and resolving any land use disputes.  Please contact us at (619) 794-0243 for fast, friendly help with all types of land use and real estate problems.

Most disability access lawsuits are brought over a lack of handicapped parking, inaccessible restrooms, and problems with entryways.  Common targets are stores, motels, restaurants, and office buildings.  If a court finds that your business violated disability access laws, your business will be required to pay up to three times the amount of the handicapped person’s losses, with a minimum of $4,000, plus attorney’s fees and costs, even if the violation is extremely minor.  It does not matter if you did not even know about the violation, or if you knew about it but could not afford the building changes.  Your business can still be required to pay and to fix the violation.

The California laws on physical access implement the federal ADA regulations, and are located in Title 24 of California Building Standards Code.  This building code section has strict and detailed requirements for disability access to commercial space.  Some typical examples of disability access code violations are: 

             •  One of your thresholds is more than 1/4-inch high (1/2-inch if beveled);

            •  A disabled access ramp has a slope of greater than five degrees;

            •  Your doors require more than five pounds of pressure to open;

            •  There aren’t 60 inches of clearance in your bathroom for a wheelchair to navigate;

            •  Your welcome mat is too soft or too thick.

These are only a few of the violations that may subject your business to a disability-access violations lawsuit. A more complete list may be found in downloadable form on the California Department of General Services website at http://www.dgs.ca.gov/dsa/Programs/progAccess/accessmanual.aspx,

The best way for your business to avoid being sued is to have your commercial space surveyed, and then take the necessary steps to fix any ADA problems.  California has a “Certified Access Specialist” program, and if you hire a certified access specialist and follow their recommendations, you can receive business tax deductions for the disability-compliance upgrades.  If you are still sued for ADA violations in state court at a later time, you gain the legal right to delay the lawsuit while you attempt to settle it in mediation.  This may save you from going through the time and expense of a trial.

If you own a business and are considering moving to a new location, or if you want to find out if your existing space needs upgrading to meet the requirements of the disability access laws, San Diego Law Firm’s real estate lawyers are standing by to assist you.  We have years of experience in helping businesses comply with the ADA, and defending businesses sued for violating the ADA.  Please call today at (619) 794-0243 to schedule an appointment. We look forward to helping you.

In the small town of Derby Line, Vermont stands a beautiful 110 year old Romanesque-style library. The Haskell Library appears to be a typical Vermont library, but its location is particularly strange. The building sits directly on the border of Ontario, Canada and Derby Line, Vermont. You enter the Library in the United States, but walk to the circulation desk, and you’re in Canada.   

Because of this peculiarity, for many years the Haskell Library enjoyed informal immunity from restrictions on international border-crossing, and people from both countries entered the library by parking and coming through the front door.  However, a recent Seattle Times article reported that crackdowns on border enforcement have changed the views toward letting the Haskell Library slide on international border enforcement.  Now, Canadian citizens have to go through a separate checkpoint before they enter the library.  

Boundaries in Everyday Life:

The above scenario is just one example of how borders and boundary lines can affect the lives of those living near or on them. From a legal standpoint, boundary lines play an important role in property ownership as well. Many homeowners forego having their property surveyed before buying or selling it. This can cause confusion as to where one property ends, and another begins.

Under the assumption that their property extends to a certain point, a homeowner may erect a garden, fence, or other structure on a part of the land they believe is theirs. Unfortunately, in many instances the land is not theirs. This mistaken (or sometimes malicious) encroachment onto another’s land causes frequent headaches in the court system.

There are several actions that may be taken to handle property encroachment. A homeowner who finds that someone has encroached on his property can seek a court order to have the encroachment removed. Or, the homeowner can sell the encroached-upon piece of their property to the encroacher for a fair price, or lease the land to the encroacher for a fair rental value. Whatever action is chosen, it’s important that the homeowner not ignore the encroachment problem.

This is because adverse possession – meaning possession that is openly visible and contrary to the interests of the homeowner – plays a role in boundary disputes. If a person continuously uses a piece of land that is not theirs, for a specific period of time, the law will often permit that person to bring a lawsuit to “quiet title.”  The result can be that an encroacher who pursues a quiet title lawsuit ends up owning a piece of the homeowner’s property. Typically, in these situations the encroacher using the homeowner’s land is also required to pay the taxes and make improvements to that portion of the land.

Because most homeowners do not want to lose part of their property to an adverse possession claim, it is important for them to take action if they suspect someone may be encroaching on their land with a building, fence, pathway, landscaping or other something else.  If you think that your land may have been encroached upon, contact one of our experienced real estate attorneys at San Diego Law Firm. Our attorneys can help you with all boundary line issues and issues arising from neighbors using your land.  Contact San Diego Law Firm today at (619) 794-0243 to schedule an appointment.

Real estate disclosure laws require sellers to tell potential buyers in writing about defects related to the home, including some defects in the surrounding neighborhood that may make the home less desirable or enjoyable.  In most states, home sellers only have to disclose problems they are aware of, but the list of things considered “problems” is enormous.  For example, as a recent article in the ABA Journal called “Bedbug Disclosure Becomes Part of NY Real Estate Deals” explained, New York home sellers must report whether the home has ever been infested with bedbugs. This was already the law in California, which requires buyers to disclose past or present treatment of “pests.”

In California, home sellers must fill out and give to buyers an elaborate home disclosure checklist covering an enormous range of problems that the sellers may know about.  For example, among other things, sellers must disclose whether the roof leaks, whether a death occurred on the property during the three previous years, or whether there is a neighborhood nuisance such as a dog that barks every night.  California sellers must also disclose if the home is vulnerable to flooding, earthquakes, fires, or environmental hazards.  Finally, depending on the age of the home, the sellers may be required by federal law to disclose knowledge of any lead-based paint in or around the home.

If sellers do not tell the buyer about a known existing or potential defect that affects the value of the home, the sellers are on the hook for the repair bills, and may even be sued by the buyer to force them to also pay for loss of use or decreased value of the home.  However, if the sellers fully disclose the defect and it becomes a problem again, the buyer will likely have to foot the repair bill with little or no chance of holding the sellers legally responsible.

If you are considering buying or selling a home with a known defect, it is a good idea to first obtain legal advice from one of the experienced real estate attorneys at San Diego Law Firm.  If you are the home seller, we can help you make full disclosures and limit your responsibility for future repair costs.  If you are the buyer, we can help you make the best use of experts to determine repair costs, or the dollar amount by which the defect reduces the value of the home.  Please contact San Diego Law Firm at (619) 794-0243 to schedule an appointment.  We look forward to helping you.

Buying and selling commercial real estate can be complicated, whether the property is worth $200,000 or $2 billion.  An experienced commercial real estate attorney can ensure the process goes as smoothly as possible and that you get the best deal.  Your attorney can also handle any potential problems with property lines, liens, and other persons’ rights to come onto your new property – for example, to use a road on your property to reach their own property.  If you are purchasing equipment along with your commercial real estate, your attorney can make sure you acquire good title to this equipment.

Contracts for commercial real estate differ in many important ways from those for residential real estate.  It’s important that the person representing you in the purchase or sale be familiar with commercial real estate law.  The attorneys at San Diego law firm are experienced in handling complex commercial real estate transactions. We have the expertise needed to draft and review purchase contracts, effectively negotiate on your behalf, and avoid any complications.  If you are considering buying or selling commercial real estate, contact San Diego Law Firm to find out how we can help protect your interests as a buyer or seller.

What is a 1031 Exchange?

Internal Revenue Code Section 1031 allows an owner of investment property to sell it and reinvest the sale proceeds in a replacement property of “like kind” without paying tax on the profits from the first property until the replacement property is sold at a later date.

The benefits of this transaction are immediate: the seller can take the money that would have been used to pay capital gains tax and depreciation recapture tax on the first property, and apply it instead to the purchase of the replacement property. However, there are technical details to be followed to obtain these tax benefits. It is advisable to seek the advice of a seasoned real estate attorney who understands the strict timelines and requirements for a valid 1031 exchange.

Using a 1031 Exchange to Build Your Estate

Whether you own one or many investment properties, a 1031 exchange can be a good vehicle to build your estate, the property that your heirs will inherit when you die.  A common estate-building technique is to deed all property into a family partnership or LLC.  During your lifetime, you receive the income from the property.  When you die, the property will not be subject to the estate tax, and your heirs can sell it and use the 1031 exchange provision of the tax code to defer capital gains tax by purchasing a replacement “like kind” property – a definition which includes any rental or investment property in the United States, from farmlands to rental property, held for a productive purpose in business or trade.  “Like kind” excludes property held for personal use – for example, a personal residence, a residence for a family member, or a hobby studio.

Rules for a 1031 Exchange

The typical 1031 exchange requires the services of a “qualified intermediary” (defined by the tax code) who holds the sale proceeds from the first property until the second property is purchased.  The seller assigns their contract for the sale of the first property and their contract to buy the replacement property to this intermediary.  A “cooperation clause” in the contract for each property alerts the buyer of the first property and seller of the second property that a 1031 exchange is in progress, and helps ensure their cooperation.

To defer all taxes that would otherwise be due on the sale of the first property, all equity from the first property must be invested in the replacement “like kind” property, and the purchase price of the second property must be equal to or greater than the price of the replacement property.  If these requirements are not completely met, then a portion of the sale proceeds from the first property will be taxable. 

A 1031 exchange has two crucial time limits.  First, the seller must identify a replacement property no more than 45 calendar days after the sale date.  Second, the seller must obtain title to the replacement property no more than 180 days calendar days after a) the first property was sold or b) the due date of the seller’s tax return for the year in which the first property was transferred, whichever occurs first.

A real estate attorney can protect your interests and ensure that all of the parties involved in your 1031 exchange process cooperate.  Our seasoned real estate and estate planning attorneys at San Diego Law Firm are skilled at working with industry experts who work as qualified intermediaries to facilitate 1031 exchanges. They can safeguard your financial interests and those of your heirs. Please call us for a consultation at (619) 794-0243 to find out if 1031 exchange will be financially helpful to you.

Unlike your real estate agent—whose goal is to complete the sale and earn a commission—your real estate lawyer doesn’t work on a commission.  What’s more, sometimes a real estate agent represents both the seller and buyer.  In these situations, there’s bound to be conflict in representing both sides.  After all, sellers want to get the highest price possible, the buyer the lowest, and the real estate agent’s commission is usually greater if the sale price is higher. 

As your real estate attorneys, it’s not our job to push for a sale.  We focus on protecting your interests because we know there’s a lot at stake in any real estate purchase and sale. 

Take a close look at the property and potential legal problems

Whether you’re a buyer or seller, your lawyer can examine any legal issues related to the property.  Buyers need to make sure their investment will be worthwhile, and sellers need to be careful not to violate real estate laws and/or violate the purchase and sale contract. 

Real estate agents do a lot in a real estate sale and purchase, but their role is not to give legal advice.  Whether you’re buying a home or investment property, there are many legal issues to examine.  For example, we’ll:

      ●    Examine the title (including the history of ownership for the property), and check whether there are any clouds on the title that need to be cleared

      ●    Look for any liens, easements, property line disputes, and zoning violations

      ●    Advise you about inspections and disclosures

      ●    Prepare your purchase agreement (see below for more on this)

Understand the deal, and know what to ask for

There’s a lot of paperwork involved in buying and selling a home and other real estate, which means there are a lot of terms to negotiate if you know what to ask for. 

Your sale or purchase officially begins with the Purchase Agreement.  If the buyer’s offer is accepted by the seller, you’re both in a binding contract.  In most situations there can be serious consequences for backing out in violation of the contract, but your lawyer can build in protections in case things go wrong later. 

The key terms of the deal are in the purchase contract, but often the real estate agent will use a standard fill-in-the-blanks contract that won’t necessarily keep your personal interests safe.  Here are a few examples of what your real estate lawyer can help you with when preparing the purchase agreement and overseeing related issues: 

      ●    Will the seller make any promises and guarantees to the buyer when transferring ownership?

      ●    If you’re a buyer, will you be let out of the contract if you can’t get a loan, or aren’t able to sell your current home?  Also, are the terms offered by the lender good for you in the long run?

      ●    If inspections reveal problems, will the seller be responsible for any and all repairs?  Will the buyer be given credits instead?  And at what point can a buyer cancel the deal?

      ●    As a buyer, do you know how you should take title to the property?  For example, will it help or hurt you to take title as “joint tenants with right of survivorship.”  If you’re a real estate investor, should you create an LLC or corporation to hold title?

Getting help at the closing

The closing finalizes the transaction and transfers ownership from seller to buyer.  We’ll make sure contingencies have been removed, settle any remaining issues, and ensure you provide and receive all the required documents.  The bottom line is that you need to fully understand the real estate documents you’re given.  We’ll explain the terms, and identify things that should be included in your purchase agreement. 

Your real estate agent or broker does a lot for you, but your agent can’t provide the same kind of legal help and advice that a real estate lawyer can.  We’ll work to protect your interests at every stage in the process and look into potential problems.  Contact San Diego Law Firm’s skilled real estate attorneys at (619) 794-0243.

What happens if you keep property titled under your personal name? 

If you’re sued and lose the case, then your personal bank accounts and other assets can be used to pay off a judgment.  But if you create an LLC or corporation, then typically only the property in the name of the company will be subject to these debts. 

To further limit potential liability, you should consider placing each investment property you own in a different company.  That way, a lawsuit against one company doesn’t affect other companies holding additional real estate. 

We’ll advise you on the best practices you should employ to you maintain the protections and benefits of California LLCs and corporations, and explain the tax implications and other important considerations. 

Real estate owners should keep in mind that lawsuits can come about for many different reasons, such as:

      ●    Accidents and injuries on the property

      ●    Legal disputes with tenants

      ●    Creditor disputes

Some of these claims could be partially covered by any insurance coverage you may have, but all too often the liability exceeds the coverage.  That’s why many people buy investment or rental properties through an LLC or corporation (or transfer title to one of these companies if the real estate is already owned under the investor’s personal name).

How else can you maximize the success of your real estate investments?

On the business end, investor and blogger John Fedro shares his advice in “5 Ways To Streamline Your Real Estate Investing Business Machine,” including:

      ●    At the top of Fedro’s list is a recommendation that you specialize in one real estate niche, because if you take on too much there’s more of a chance that you’ll fail. 

      ●    You’re also forewarned that even though not everything about your real estate ventures is exciting, you can’t ignore your responsibilities.  To that end, he suggests you make sure you complete at least one real estate task every day. 

      ●    Also do your “due diligence.”  In other words, before buying, thoroughly inspect every property so that you don’t end up in a financial and legal disaster later.  (This means inspecting the physical condition of the property, and looking for potential legal problems with the property.)

Before you buy real estate, contact your real estate attorney at San Diego Law Firm to evaluate the many legal issues involved in your real estate transaction. 

Don’t wait too long, because an LLC or corporation won’t protect you from claims created while the real estate was owned under your personal name.  Find out whether an LLC or corporation is a good option for ownership of your investment properties by contacting San Diego Law Firm’s skilled real estate attorneys at (619) 794-0243.

As pointed out earlier, any property taken by the government must be for a public purpose, such as to build schools and roads, to protect the public health and safety, or for other public projects.  In return, you’re owed just compensation.  So what is fair compensation?  This is one of the most important questions to ask in every condemnation case, because simple fair market value isn’t always the answer.  First, the government’s appraisal of fair market value will probably be different from another appraiser’s findings.  Second, you must identify all property interests and costs that should legally be reflected in the compensation offered for your relocation, especially when there is a business on the land to be taken.  In these cases, fixtures, equipment, and your business’s goodwill may be affected by a move, and these values need to be assessed and negotiated.  Often tenants also have the right to be compensated for their interests in a lease, such as the difference between the rent under the lease and a potentially higher fair market rent once the property is condemned.  What’s more, eminent domain can affect you even if your property isn’t being condemned.  You may instead be in the situation where the government’s actions on neighboring land affect your own property and diminish its value.  Or it may be that even though you still own your property, it is so heavily regulated that you lose almost all value in it, causing the government’s actions to amount to a “regulatory taking.”  In any of these situations, we’ll seek the compensation owed to you for your loss.

Here in San Diego, you may often come across local news of government takings through eminent domain.  Recently, the San Diego Union Tribune’s Matthew Hall reported that if the San Diego Chargers build a downtown stadium, the city might have to take over private land through its eminent domain power.  Similarly, Michele Clock of the San Diego UT notes that as part of Lemon Grove’s downtown redevelopment, the city may have to resort to taking land through eminent domain if negotiations to purchase a property (on which a storage business is located) fail.  If you’re facing similar circumstances, whether or not you should take the deal offered or go to court instead greatly depends on the legality of the government’s actions, and on how much the government is offering compared to how much you believe your property is worth.  In helping you answer these questions, we’ll also review whether the government agency involved is following the required legal process in condemnation proceedings, and strategize and prepare for the public hearing that’s held before an eminent domain lawsuit is filed.  If a favorable settlement isn’t reached, we’ll prepare for trial, file the required documents, and pursue your rights in court.  Avoid costly mistakes and make informed decisions by engaging San Diego Law Firm as soon as you learn your property has been targeted.  We’ll work to strengthen your bargaining power when negotiating with the government, coordinate with experienced appraisers, and pursue your rights in court when needed to further your interests.  Whether it’s your residence or commercial real estate that’s at stake, or if you’re a business owner leasing property that faces condemnation, our experienced San Diego real estate lawyers understand your needs and are here to help.  To contact San Diego Law Firm, call us at (619) 794-0243.