Legal Advice Blog: Legal Advice, Case Insights, & Local Law Information

Many people in Los Angeles dream of living in a gated community where privacy and security suggest an almost idyllic quality of life. However, purchasing a home in a private community — such as a condominium, in a retirement neighborhood or a vacation timeshare — often includes membership in a Home Owners’ Association or similar organization. Reading the fine print before signing on may save potential homeowners the headache of a real estate dispute. Belonging to an HOA means agreeing to abide by its Declaration of Covenants, Conditions and Restrictions even if they seem disagreeable. The terms of the CC&R are meant to protect the property values in the community as well as maintain a certain quality of life. So while the CC&R may prevent one’s neighbor from putting up a gaudy display of holiday lights or owning a persistently barking dog, it may also prevent one from displaying a flag of his or her favorite football team or installing an adorable mailbox. HOA membership is not voluntary in most common interest communities. A person who purchases a home in an HOA-controlled community is legally bound to the association’s rules. In fact, refusing to abide by the terms of the CC&R, or even breaking the rules out of ignorance, may result in hefty fines or other penalties. The CC&R in one’s community may even give the HOA the right to foreclose on one’s house for unpaid fines or dues. Carefully reading the CC&R and having a thorough understanding of one’s rights and responsibilities is vital before purchasing a home in a common interest community. Knowing what is in the contract will make it easier to recognize when one’s rights are being violated by an HOA. People in Los Angeles who feel their HOA is not keeping its end of the covenant or is overstepping its authority may consult an attorney for advice on how to resolve this real estate dispute. Source: The Huffington Post, “ When Homeowners’ Association Living Goes Haywire: How To Prevent The Common Problems Of Living Under An HOA or COA “, Jack Hanson, June 29, 2016

In a prior post, we noted how the commercial real estate market was expected to be strong through 2018, thanks to several positive economic factors. They include a strong job market, low interest rates and dwindling vacancies. The Los Angeles Times recently reported on another example of this trend. Rhode Island toy maker Hasbro recently decided to move its headquarters in Burbank to a larger space in the city’s media district. Specifically, Hasbro will now be located in the Media Studios North office park. The reasoning behind this move? It needed more room for its growing workforce. The 78,000 square footage of office space is nearly double the size of the previous building. And it reflects the ongoing opportunities in the Tri-Cities area of Pasadena, Glendale and Burbank. It is important to note that rents per square foot are increasing slightly, from $3.00 in the first few months of the year to $3.02 now. More importantly, vacancy rates have declined from 14.8 percent to 14 percent. The growing market is a departure from the first quarter of this year, as the job market suffered several months of declines and many were concerned about slowing economic growth overall. Nevertheless, commercial real estate opportunities should be undertaken with caution underscored with legal advice. An experienced real estate attorney can help investors understand the legal implications with acquiring property and forge creative financial deals. It remains to be seen whether these opportunities will continue as full employment may lead to slower commercial real estate growth.

In a prior post, we noted how the commercial real estate market was expected to be strong through 2018, thanks to several positive economic factors. They include a strong job market, low interest rates and dwindling vacancies. The Los Angeles Times recently reported on another example of this trend. Rhode Island toy maker Hasbro recently decided to move its headquarters in Burbank to a larger space in the city’s media district. Specifically, Hasbro will now be located in the Media Studios North office park. The reasoning behind this move? It needed more room for its growing workforce. The 78,000 square footage of office space is nearly double the size of the previous building. And it reflects the ongoing opportunities in the Tri-Cities area of Pasadena, Glendale and Burbank. It is important to note that rents per square foot are increasing slightly, from $3.00 in the first few months of the year to $3.02 now. More importantly, vacancy rates have declined from 14.8 percent to 14 percent. The growing market is a departure from the first quarter of this year, as the job market suffered several months of declines and many were concerned about slowing economic growth overall. Nevertheless, commercial real estate opportunities should be undertaken with caution underscored with legal advice. An experienced real estate attorney can help investors understand the legal implications with acquiring property and forge creative financial deals. It remains to be seen whether these opportunities will continue as full employment may lead to slower commercial real estate growth.

The real estate market in Southern California is enjoying healthy growth. That much is obvious given the number of cranes that are seen on a given day and how many more companies are vying for new and upgraded spaces. We noted in our last post how toy maker Hasbro will be moving into a new building that will accommodate its new and growing workforce. With such optimism about the commercial real estate market, the question must be posed: when will it end? For real estate investors, this is a critical question since the most common way to make money in real estate is to buy low and to sell high. If you have the misfortune of buying high in a hot market, it is less likely that your investment will appreciate. This is why the latest commercial real estate forecast from the UCLA Anderson School of Management is important. The forecast is a collection of views from real estate developers with respect to the market for the next three years, which is also essential given the amount of time it takes for a commercial project to be built. According to the latest survey, it appears that the commercial office market is topping out. This follows sentiments that rental rate growth and vacancy rates have already hit their apex. Because of this, developers and investors alike must be particularly careful with new projects, and the guidance of an experienced real estate attorney can guard against potential losses. The preceding is not legal advice.

The real estate market in Southern California is enjoying healthy growth. That much is obvious given the number of cranes that are seen on a given day and how many more companies are vying for new and upgraded spaces. We noted in our last post how toy maker Hasbro will be moving into a new building that will accommodate its new and growing workforce. With such optimism about the commercial real estate market, the question must be posed: when will it end? For real estate investors, this is a critical question since the most common way to make money in real estate is to buy low and to sell high. If you have the misfortune of buying high in a hot market, it is less likely that your investment will appreciate. This is why the latest commercial real estate forecast from the UCLA Anderson School of Management is important. The forecast is a collection of views from real estate developers with respect to the market for the next three years, which is also essential given the amount of time it takes for a commercial project to be built. According to the latest survey, it appears that the commercial office market is topping out. This follows sentiments that rental rate growth and vacancy rates have already hit their apex. Because of this, developers and investors alike must be particularly careful with new projects, and the guidance of an experienced real estate attorney can guard against potential losses. The preceding is not legal advice.

People in Los Angeles love the Runyon Canyon Park. It is estimated that 1.8 million people visit the 136 acre park each year for the hiking trails, the areas where dogs can roam off-leash, and of course, the Hollywood sign. However, catering to the masses costs money. This is why the city’s Recreation and Parks Department’s partnership division has allowed private donor to sponsor maintenance projects. One such project has raised the ire of park users. An LA Times.com report highlighted the story of a private company’s sponsorship and construction of a retaining wall and basketball court that was initially approved by the city in November. Nevertheless, public outcry over the company’s logo on the basketball court has caused city officials to rescind its approval. Ironically, the rescission will cost the city nearly $210,000 because much of the work on the project has already been completed. Park users were apparently unaware of the project before the end of March, when the park was being closed to repair aging water pipes. The park was scheduled to be closed for four months while the retaining wall and basketball court were being built. This caused opponents of the project to dominate a recent council meeting and inundate the councilman responsible for approving the project with phone calls. While the council has yet to officially halt the project through a vote, it is a virtual certainty that it will be halted. The project is a cautionary tale for private entities working with city officials. It is helpful to have an experienced real estate attorney to help navigate the administrative process so that a project can be successful.

People in Los Angeles love the Runyon Canyon Park. It is estimated that 1.8 million people visit the 136 acre park each year for the hiking trails, the areas where dogs can roam off-leash, and of course, the Hollywood sign. However, catering to the masses costs money. This is why the city’s Recreation and Parks Department’s partnership division has allowed private donor to sponsor maintenance projects. One such project has raised the ire of park users. An LA Times.com report highlighted the story of a private company’s sponsorship and construction of a retaining wall and basketball court that was initially approved by the city in November. Nevertheless, public outcry over the company’s logo on the basketball court has caused city officials to rescind its approval. Ironically, the rescission will cost the city nearly $210,000 because much of the work on the project has already been completed. Park users were apparently unaware of the project before the end of March, when the park was being closed to repair aging water pipes. The park was scheduled to be closed for four months while the retaining wall and basketball court were being built. This caused opponents of the project to dominate a recent council meeting and inundate the councilman responsible for approving the project with phone calls. While the council has yet to officially halt the project through a vote, it is a virtual certainty that it will be halted. The project is a cautionary tale for private entities working with city officials. It is helpful to have an experienced real estate attorney to help navigate the administrative process so that a project can be successful.

As we noted in a few of our posts, the commercial real estate market has shown positive signs that suggest it will be a banner year for investors. Demand for high level space is very active, and a number of projects (including the Rams’ new stadium) suggests that development near landmarks will be active for years to come. Part of this new found demand for commercial space comes from foreign investment. And a move by Congress earlier this year sets the stage for more foreign money to come into Southern California’s real estate market. Essentially, Congress relaxed the Foreign Investment in Real Property Tax Act. This law requires foreign investors to pay additional income taxes on their earnings when they sell a property in the United States. Initially passed in 1981, legislators were afraid of foreign investors purchasing large portions of commercial real estate, including farmland for future development. The move was largely a defense against individual investors. However, more investment came foreign public pension funds which was viewed much more favorably.  In fact, foreign pension funds have become the largest sources of foreign money used in commercial real estate projects, according to the Wall Street Journal. To avoid the additional investment tax, foreign pensions previously purchased minority shares within real estate groups, since they were required to share ownership (and control) of such a property with other investors. But the new tax application may change this. With this change, foreign investment in commercial real estate is expected to increase by $20-$30 billion per year. These new opportunities exemplify the need for experienced legal counsel with real estate projects.

As we noted in a few of our posts, the commercial real estate market has shown positive signs that suggest it will be a banner year for investors. Demand for high level space is very active, and a number of projects (including the Rams’ new stadium) suggests that development near landmarks will be active for years to come. Part of this new found demand for commercial space comes from foreign investment. And a move by Congress earlier this year sets the stage for more foreign money to come into Southern California’s real estate market. Essentially, Congress relaxed the Foreign Investment in Real Property Tax Act. This law requires foreign investors to pay additional income taxes on their earnings when they sell a property in the United States. Initially passed in 1981, legislators were afraid of foreign investors purchasing large portions of commercial real estate, including farmland for future development. The move was largely a defense against individual investors. However, more investment came foreign public pension funds which was viewed much more favorably.  In fact, foreign pension funds have become the largest sources of foreign money used in commercial real estate projects, according to the Wall Street Journal. To avoid the additional investment tax, foreign pensions previously purchased minority shares within real estate groups, since they were required to share ownership (and control) of such a property with other investors. But the new tax application may change this. With this change, foreign investment in commercial real estate is expected to increase by $20-$30 billion per year. These new opportunities exemplify the need for experienced legal counsel with real estate projects.

It finally happened. What analysts, realtors, lenders and sellers alike have been waiting for since the real estate market plummeted nearly a decade ago. The real estate market has risen to levels seen since the real estate bubble burst in 2008. According to a recent LAtimes.com report, only Orange County has reached pre-recession levels. The median price of new and resale homes in the region reached $651,500 in May, eclipsed the previous high of $645,000 in June of 2007. This new high was not adjusted for inflation In 2008, the great recession began and home prices reportedly bottomed out in 2009 at $370,000. While this may seem to be cause for celebration, home prices in other counties in the region have a long way to go. For instance, prices in San Bernadino County are still 25 percent below pre-recession levels, and they are 23.6 percent behind such levels in Riverside County. But there is optimism in other parts of the region, since prices in Los Angeles and San Diego counties are approaching their 2007 levels. Additionally, strong economic growth and the availability of home loans suggests that additional price gains are realistic in 2017 and 2018. Because of this, real estate opportunities abound for investors in residential markets just as they exist in the commercial market. However, investors must be cautious of potential downturns. Indeed, analysts do not see catastrophic falls given the legal and regulatory protections in place now, but the help and guidance of an experienced real estate attorney can help in protecting investors.

It finally happened. What analysts, realtors, lenders and sellers alike have been waiting for since the real estate market plummeted nearly a decade ago. The real estate market has risen to levels seen since the real estate bubble burst in 2008. According to a recent LAtimes.com report, only Orange County has reached pre-recession levels. The median price of new and resale homes in the region reached $651,500 in May, eclipsed the previous high of $645,000 in June of 2007. This new high was not adjusted for inflation In 2008, the great recession began and home prices reportedly bottomed out in 2009 at $370,000. While this may seem to be cause for celebration, home prices in other counties in the region have a long way to go. For instance, prices in San Bernadino County are still 25 percent below pre-recession levels, and they are 23.6 percent behind such levels in Riverside County. But there is optimism in other parts of the region, since prices in Los Angeles and San Diego counties are approaching their 2007 levels. Additionally, strong economic growth and the availability of home loans suggests that additional price gains are realistic in 2017 and 2018. Because of this, real estate opportunities abound for investors in residential markets just as they exist in the commercial market. However, investors must be cautious of potential downturns. Indeed, analysts do not see catastrophic falls given the legal and regulatory protections in place now, but the help and guidance of an experienced real estate attorney can help in protecting investors.

An essential question in whether a business takes on a real estate project is whether the project makes sense financially. This involves making thorough estimates on the costs to renovate a property and balancing them against projected revenue streams. One important aspect is determining how much will be expended in securing and paying off a commercial real estate loan. A common way to determine this is to find out the interest rate for a loan as well as the annual percentage rate (APR). Both are useful tools to evaluate the cost of a loan, but understanding the differences between them are key. This post will briefly explain their differences. The interest rate on a commercial real estate loan is fairly straightforward. It encompasses the percentage that you will be charged for borrowing the money. However, it does not include any of the costs and fees involved with administering the loan. The APR involves the entire cost of the loan, including feeds for originating the loan, closing costs, and most importantly, points assessed on the loan. The APR commonly gives potential borrowers a comprehensive view of what will be spent over the life of the loan. However, comparing different APR’s may not always be a true indicator of what the loan may cost. For instance, a publicized APR may not include some of the fees commonly hidden from public view, such as third party title and appraisal fees. So as you evaluate loan options, it is helpful to review a lender’s Good Faith Estimate. If you have questions when evaluating loan options, an experienced real estate attorney can advise you.