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.

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.

As prices go up in San Diego, more homeowners will likely put their real estate on the market.  San Diego’s North County Times reports that median home prices in our county climbed 8.9 percent in January.  If you’re a potential real estate seller or buyer, your focus is probably on the sale/purchase price and financing.  These are no doubt essential terms to the property’s sale and purchase.  For the long run, also think about what type of deed will be given.   If you don’t, you may regret it later. 

What is a deed, and what can it do for you?

A deed is a document that transfers real estate ownership from seller to buyer.  Certain basic information has to be included in a deed for it to be valid.  This includes the names of the buyers and sellers, the property’s legal description (which isn’t as simple as a street address), words that transfer the property, signatures, and so on.

If you’re a seller, the deed can reduce the chances that you’ll be financially responsible for the real estate after you’ve sold it.  If you’re a buyer, the deed can help protect your major investment.  On the other hand, the deed may not give you any protection at all. 

After buying or selling real estate, always double check that the deed was officially “recorded.”  This means that for local real estate, the deed will be filed at the San Diego County Recorder’s office.  Once recorded, anyone is free to check the property’s ownership records.  This simple step is one important way to protect buyers and sellers.  But before the deed is turned in, you’ll need to figure out what kind of deed should be written up:

“Warranty Deed” or “Quitclaim Deed”?  Do you know the difference?

There are many different types of deeds.  Each has its own purpose, but not every kind of deed will be right for your situation.  After a sale goes through, there’s a chance that problems can come to light such as lawsuits, liens, or “easements” that give someone the right to use the property.  But who will be responsible for these problems?  The answer might depend on the deed you’ve negotiated before buying the real estate. 

Two common deed examples are the quitclaim deed and warranty deed. 

     ●  A quitclaim deed only transfers the seller’s ownership interest in the property (if any), and makes no promises to the buyer. 

     ●  A warranty deed can include many promises to the buyer.  For example, a warranty deed might guarantee that the seller will be responsible for existing liens and other problems – even problems created by people who owned the property before the current seller. 

There’s usually more than meets the eye when it comes to deeds, and the promises that should or shouldn’t be included when buying and selling real estate.  With a sale and purchase this big, you need to fully understand what you’re bargaining for.  As experienced real estate attorneys, we’ll advise you on the potential advantages, drawbacks, and other legal considerations.  You can do a lot to minimize risk in your real estate sale or purchase, which means saving time and money later.  Get the information and advice you need with any deed and title problems from San Diego Law Firm’s skilled real estate lawyers.  Reach us at (619) 794-0243.

In a typical real estate purchase, California law requires sellers to disclose certain defects that they knew or should have known about, and the seller must provide the buyer with an additional disclosure statement.  Not only that, but the seller’s real estate agent must visually inspect the home and disclose any information that can materially affect the property’s marketability.  These types of problems can hurt resale value and seriously affect a buyer’s ability to sell the real estate later on.  So what must a seller disclose? Examples include leaky roofs, defective plumbing, electrical problems, building code or zoning violations, construction defects, insect infestations, and other problems or conditions.  Legal problems that must be disclosed include encroachments or easements, liens on the property, or issues with title to the property.  At times, the seller’s actions may even amount to fraud.

In addition to the mandatory disclosures under California law, when negotiating the deal a seller may decide to go beyond the minimum disclosure requirements and include warranties in the real estate purchase agreement.  Unlike with the state law disclosures, if a warranty in the contract is breached, the seller can be held liable even if the seller had no reason to know that the representation was false.  If you’ve discovered defects in your home after moving in or have been defrauded by the seller, contact our skilled real estate lawyers as soon as possible, before any time limits on your claim expire.  We’ll discuss your options and help you obtain compensation to repair the undisclosed defect or, in some cases, rescind the purchase.  Similarly, if you’re a seller who has wrongfully been accused in a nondisclosure case, we’ll evaluate the circumstances and work toward resolution.  Contact San Diego Law Firm’s experienced advocates at (619) 794-0243 for help with any real estate dispute.