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

Commercial real estate investments in California encompass a range of niche markets drawing both experienced investors and green professionals looking to expand their portfolio. One of the challenges in a bustling market is the ability to stay competitive. Investors who identify personal strategies for success and strive to improve their competencies can maintain a competitive edge even with the constant influx of investors. Thinking outside the box Finding promising investment opportunities requires days and sometimes months of grueling research. Investors often have strict criteria they have identified as playing a crucial role in making any opportunity worthwhile. While they should establish some boundaries, The Motley Fool suggests that investors should think outside of the box. While a piece of commercial real estate may appear one way, investors can make more informed decisions after considering a variety of scenarios and a variety of outcomes. They may look for other opportunities looming in the shadows of obviously promising investments to identify lesser-known options that could also have a favorable outcome. Refining the management aspect How effectively investors can manage their property directly correlates with their success. The Motley Fool encourages investors to establish a consistent method for property management. Several factors impact management strategies including the following: Property size Property location Property uses Zoning requirements Some commercial real estate investors choose to manage their properties on their own. Others rely on a third-party to facilitate property upkeep and maintenance according to requested standards and timelines. Regardless of how investors choose to manage the properties in their portfolio, they should use consistent, reliable and effective methods. Keeping their properties in optimal condition can make a considerable difference in their ability to remain competitive.

Contracts protect business interests and lower the company’s risk when entering partnerships, hiring employees or otherwise conducting major transactions. As such, a breach of contract can represent a major financial loss. Learn more about proving a breach of contract in California when a partner, supplier or contractor fails to meet the terms of an agreement. Elements of breach of contract The plaintiff in this type of case must prove that a valid contract existed. They must also show that they performed the contract and the defendant failed to do so. Finally, the plaintiff must show that financial damages resulted directly from this breach of contract. For example, if a chef at a restaurant breached a non-compete agreement and opened a cafe across the street, the plaintiff can attempt to prove that this location caused their business to decline. Available damages and remedies California does not allow punitive damages in a breach of contract case. The plaintiff can seek compensation for the business’s actual financial loss. Coverage for legal fees is available only when the company made this provision in the original contract. In lieu of monetary damages, the plaintiff can ask the court to require the defendant to perform the terms of the contract as agreed. Businesses do not necessarily have to go to court to protect their interests in a contract breach. Alternative dispute resolution methods such as mediation can help companies reach an agreement with former partners or employees. Companies that do decide to sue have four years to do so in California for a written contract. The statute of limitation for breach of an oral contract is just two years.

Contracts protect business interests and lower the company’s risk when entering partnerships, hiring employees or otherwise conducting major transactions. As such, a breach of contract can represent a major financial loss. Learn more about proving a breach of contract in California when a partner, supplier or contractor fails to meet the terms of an agreement. Elements of breach of contract The plaintiff in this type of case must prove that a valid contract existed. They must also show that they performed the contract and the defendant failed to do so. Finally, the plaintiff must show that financial damages resulted directly from this breach of contract. For example, if a chef at a restaurant breached a non-compete agreement and opened a cafe across the street, the plaintiff can attempt to prove that this location caused their business to decline. Available damages and remedies California does not allow punitive damages in a breach of contract case. The plaintiff can seek compensation for the business’s actual financial loss. Coverage for legal fees is available only when the company made this provision in the original contract. In lieu of monetary damages, the plaintiff can ask the court to require the defendant to perform the terms of the contract as agreed. Businesses do not necessarily have to go to court to protect their interests in a contract breach. Alternative dispute resolution methods such as mediation can help companies reach an agreement with former partners or employees. Companies that do decide to sue have four years to do so in California for a written contract. The statute of limitation for breach of an oral contract is just two years.

In 2020, California’s commercial property owners faced a range of unexpected changes and fluctuations. Many commercial buildings across the state and nation wound up closing abruptly. These sudden closures have raised numerous questions about how property owners should handle their spaces when it comes to liability, insurance and related issues and concerns. According to GlobeSt.com, as a commercial property owner, you have an obligation to stay on top of local, state and federal guidelines when it comes to mitigating possible future losses and maintaining the integrity of your commercial property. You may also want to take these additional steps to help protect the value of your assets during uncertain times. Develop a property management plan You may want to work with an environmental engineer to come up with a list of tasks and duties to take care of while your property remains vacant. These tasks might include performing periodic inspections to check for leaks or HVAC or indoor air quality issues, among other possible areas of concern. Review your insurance policy When your commercial building reopens for business, it may have insurance implications. You may want to see if your insurance policy contains any language about economic losses due to environmental factors and circumstances. Determine whether litigation is necessary If your commercial tenant has to vacate your space for a period, he or she should leave it in appropriate condition. If your tenant leaves your space in poor condition or leaves hazardous materials behind, you may need to file a claim against him or her within a specific timeframe. Sudden business and building closures have created considerable uncertainty among commercial landlords. The more you understand about your responsibilities in these circumstances, the better the chance of you experiencing minimal, if any, losses.

In 2020, California’s commercial property owners faced a range of unexpected changes and fluctuations. Many commercial buildings across the state and nation wound up closing abruptly. These sudden closures have raised numerous questions about how property owners should handle their spaces when it comes to liability, insurance and related issues and concerns. According to GlobeSt.com, as a commercial property owner, you have an obligation to stay on top of local, state and federal guidelines when it comes to mitigating possible future losses and maintaining the integrity of your commercial property. You may also want to take these additional steps to help protect the value of your assets during uncertain times. Develop a property management plan You may want to work with an environmental engineer to come up with a list of tasks and duties to take care of while your property remains vacant. These tasks might include performing periodic inspections to check for leaks or HVAC or indoor air quality issues, among other possible areas of concern. Review your insurance policy When your commercial building reopens for business, it may have insurance implications. You may want to see if your insurance policy contains any language about economic losses due to environmental factors and circumstances. Determine whether litigation is necessary If your commercial tenant has to vacate your space for a period, he or she should leave it in appropriate condition. If your tenant leaves your space in poor condition or leaves hazardous materials behind, you may need to file a claim against him or her within a specific timeframe. Sudden business and building closures have created considerable uncertainty among commercial landlords. The more you understand about your responsibilities in these circumstances, the better the chance of you experiencing minimal, if any, losses.

A leasehold estate is what you have when you have an agreement to rent a property. It covers the time you have rights to and temporary ownership of the property. According to the California Department of Real Estate, there are four types of leasehold estates that you may have. Estate from period to period An estate from period to period is when you rent for a specific time and renew your lease at the end of that time. It can be days, weeks or years in length. Your agreement with the landlord will specify this type of leasehold estate. You probably recognize this as a common type of lease. Many landlords will rent on a month-to-month basis. The main idea, though, is that the lease is in effect for the specified period, and at the end, you and the landlord can decide to renew or not. Estate for years An estate for years may not last for years. It can be days, weeks or months as well. The idea behind this type of lease is that it sets a fixed time period in which you will rent the property. A common use for this type of lease is when the renter knows he or she only needs the property for a set time. For example, if you sold your home and need some place to rent for the two months between the sell of your home and the purchase of the new one, then you may have this type of lease for a two-month period. Estate at sufferance An estate at sufferance is when you remain in possession of the property after the expiration of your lease. This occurs without the owner’s consent, so you do not sign a new lease or make other agreements with the owner that allows you to legally remain in control of the property. Estate at will An estate at will does not have a set time. You or the landlord can decide at any time that you will end the agreement. It is not common because once you start paying rent at a regular interval, it becomes an estate from period to period.

A leasehold estate is what you have when you have an agreement to rent a property. It covers the time you have rights to and temporary ownership of the property. According to the California Department of Real Estate, there are four types of leasehold estates that you may have. Estate from period to period An estate from period to period is when you rent for a specific time and renew your lease at the end of that time. It can be days, weeks or years in length. Your agreement with the landlord will specify this type of leasehold estate. You probably recognize this as a common type of lease. Many landlords will rent on a month-to-month basis. The main idea, though, is that the lease is in effect for the specified period, and at the end, you and the landlord can decide to renew or not. Estate for years An estate for years may not last for years. It can be days, weeks or months as well. The idea behind this type of lease is that it sets a fixed time period in which you will rent the property. A common use for this type of lease is when the renter knows he or she only needs the property for a set time. For example, if you sold your home and need some place to rent for the two months between the sell of your home and the purchase of the new one, then you may have this type of lease for a two-month period. Estate at sufferance An estate at sufferance is when you remain in possession of the property after the expiration of your lease. This occurs without the owner’s consent, so you do not sign a new lease or make other agreements with the owner that allows you to legally remain in control of the property. Estate at will An estate at will does not have a set time. You or the landlord can decide at any time that you will end the agreement. It is not common because once you start paying rent at a regular interval, it becomes an estate from period to period.

When you own commercial property that you lease or rent to tenants, failure to live up to your responsibilities to them can result in protracted and expensive legal disputes. While the commercial leases or rental agreements you negotiate with your respective tenants likely will set forth which of you must do which things to or on the property, PekinInsurance.com advises that you, as the property owner, cannot delegate some responsibilities to your tenants. Habitable building California law requires you to provide your commercial tenants with not only their own habitable spaces, but also an overall habitable building. This means that it is your responsibility, not theirs, to abide by the rules and regulations set forth in the building codes applicable to your structure, be they state, county or city. Major repairs and maintenance Nor can you delegate your responsibility to adequately maintain and repair your building and its individual units and spaces. Consequently, you should regularly inspect and, when necessary, repair the following: Your building’s roof and paneling Its water pipes and connections Its heating and air conditioning units Its fire alarms and smoke detectors Any security devices you provide for your tenants’ doors and windows Any appliances you provide your tenants Waste removal You likewise bear responsibility for keeping your building and its common grounds and surrounding premises in a safe, clean and reasonably hazard-free condition. This includes not only regular trash removal, but also the removal of snow, ice and other debris from your building’s parking lots(s) and sidewalks. Also keep in mind that you likewise bear responsibility for making your building compliant with the Americans With Disabilities Act if it or any of its tenant-occupied spaces are open to the public.

When you own commercial property that you lease or rent to tenants, failure to live up to your responsibilities to them can result in protracted and expensive legal disputes. While the commercial leases or rental agreements you negotiate with your respective tenants likely will set forth which of you must do which things to or on the property, PekinInsurance.com advises that you, as the property owner, cannot delegate some responsibilities to your tenants. Habitable building California law requires you to provide your commercial tenants with not only their own habitable spaces, but also an overall habitable building. This means that it is your responsibility, not theirs, to abide by the rules and regulations set forth in the building codes applicable to your structure, be they state, county or city. Major repairs and maintenance Nor can you delegate your responsibility to adequately maintain and repair your building and its individual units and spaces. Consequently, you should regularly inspect and, when necessary, repair the following: Your building’s roof and paneling Its water pipes and connections Its heating and air conditioning units Its fire alarms and smoke detectors Any security devices you provide for your tenants’ doors and windows Any appliances you provide your tenants Waste removal You likewise bear responsibility for keeping your building and its common grounds and surrounding premises in a safe, clean and reasonably hazard-free condition. This includes not only regular trash removal, but also the removal of snow, ice and other debris from your building’s parking lots(s) and sidewalks. Also keep in mind that you likewise bear responsibility for making your building compliant with the Americans With Disabilities Act if it or any of its tenant-occupied spaces are open to the public.

When property taxes go unpaid for a certain length of time, the taxing authority may auction the property off to satisfy the tax debt. Nearly anyone may buy a property at a tax sale, with a few exceptions, such as the tax collector who is holding the sale. Property tax auctions are often excellent opportunities to purchase real estate at a discount. The sale price for auction property is often below market value. As a buyer, you assume a degree of risk in exchange for that discount. These tips may help you prepare for a tax sale. 1. Find available properties The taxing authority holding the tax sale typically maintains a list or website containing tax sale information, including property addresses, sale dates and other relevant details. You can find the tax sale list for Los Angeles County on the county treasurer’s website. 2. Research the properties The due diligence process for purchasing a property at a tax sale is different from the process you would normally encounter when buying real estate. Try to learn as much information as you can about a property before the sale. Failure to fully research a property may lead to property disputes and other problems. 3. Determine the minimum bid In a tax sale, the starting bid is the total amount of unpaid property taxes, plus interest, sales costs and other fees as required by law. The tax collector will not sell the property unless you or another buyer meets this bid. 4. Follow up the night before Property owners have the right to pay the delinquent taxes and save the property from auction. If the owner redeems the property by 5 pm on the evening before the sale, the tax collector will not sell the property. If you are considering purchasing a property at a tax auction, always take all necessary precautions to be sure the property is worth the investment.

When property taxes go unpaid for a certain length of time, the taxing authority may auction the property off to satisfy the tax debt. Nearly anyone may buy a property at a tax sale, with a few exceptions, such as the tax collector who is holding the sale. Property tax auctions are often excellent opportunities to purchase real estate at a discount. The sale price for auction property is often below market value. As a buyer, you assume a degree of risk in exchange for that discount. These tips may help you prepare for a tax sale. 1. Find available properties The taxing authority holding the tax sale typically maintains a list or website containing tax sale information, including property addresses, sale dates and other relevant details. You can find the tax sale list for Los Angeles County on the county treasurer’s website. 2. Research the properties The due diligence process for purchasing a property at a tax sale is different from the process you would normally encounter when buying real estate. Try to learn as much information as you can about a property before the sale. Failure to fully research a property may lead to property disputes and other problems. 3. Determine the minimum bid In a tax sale, the starting bid is the total amount of unpaid property taxes, plus interest, sales costs and other fees as required by law. The tax collector will not sell the property unless you or another buyer meets this bid. 4. Follow up the night before Property owners have the right to pay the delinquent taxes and save the property from auction. If the owner redeems the property by 5 pm on the evening before the sale, the tax collector will not sell the property. If you are considering purchasing a property at a tax auction, always take all necessary precautions to be sure the property is worth the investment.

Many business owners lease commercial space for their offices, especially when starting out. Because signing a commercial lease is a huge commitment, it is crucial that you enter into the agreement fully informed. Forbes explains a few possible issues often found in leases so you can take the right steps to avoid them. By watching out for the following, you can rest assured that the lease you choose is in your best interest. Pass-through utility costs Most commercial leases include terms that stipulate tenants must pay for a portion of the utility costs, while the property owner takes care of the rest. Pass-through costs should be proportionate to the amount of space you are leasing. If you are expected to pay for utilities your business does not even use, it is best to keep looking for a suitable commercial property. Undisclosed fees Commercial leases are often complex. As a result, it is hard to determine all the hidden costs and fees that may be lurking beneath the fine print. That is why you or your attorney should request a full breakdown of all fees prior to signing. That way you have an opportunity to get clarification on fees that seem unnecessary or redundant. Scalability If your business is thriving, there is always a chance that you will need more office space in the future. Accordingly, it makes sense to secure a commercial lease with the ability to scale up built in. Otherwise, you may find yourself on the hunt for a new location when your existing lease is up and the office no longer meets your needs. Think about your plans over the lease term: Will you be hiring more workers? Do you have new products under development? Are planning on acquiring other businesses? If yes, scalability should be a priority.