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

California real estate professionals like you may sometimes get into disputes. Whether it is with a client or someone else, disputes are harrowing. Even professionals find these situations stressful. There are different ways to handle disputes. Some methods are better suited to certain situations than others. Mediation and arbitration are two of these methods. How do mediation and arbitration help save relations? The Balance discusses mediation and arbitration for real estate. There are other methods of handling disputes as well, such as litigation. But litigation is often expensive and time-consuming. It involves all parties going to court. In the end, you may also end up burning bridges that could have come in handy in the future. There are better ways to go about this that do not involve burning bridges. Many entrepreneurs like yourself prefer to maintain peace and relations. Arbitration and mediation are two ways of doing that. They both involve negotiations outside of court. This saves time and money. Primary differences between mediation and arbitration So what are the primary differences? With arbitration, an arbitrator hears evidence from all involved parties. From that, they make a decision on what you should do. Mediation is a more flexible process. It relies on all parties working together to come to a conclusion that everyone can accept. At the end, you walk away with a written agreement. But this agreement is not legally binding. In other words, arbitration does not rely on the disputing parties as much as the arbitrator. In mediation, the parties share an equal amount of responsibility. The mediator is often there just to keep things running in a smooth way.

Residential rent control is a cap on the amount of money a landlord can charge tenants per month to lease a living space. It is beneficial for residential tenants because it prevents their rent from increasing to something more than they can afford. However, what is beneficial in residential real estate can be detrimental to commercial real estate. Approximately 30 years ago, the California legislature recognized the potential statewide adverse economic effects of commercial rent control. Therefore, it passed a law prohibiting any public entity from enacting or enforcing it. Why is commercial rent control detrimental? SF Gate explains why commercial rent control is not beneficial. The businesses that receive the benefit of commercial rent control have an unfair advantage over their competitors. This discourages competition among businesses, and the open market suffers as a result. Why is a statewide prohibition on commercial rent control necessary? According to the California Civil Code, even if only one community were to enact commercial rent control, the economic impact would extend beyond its borders. The resulting economic drain could extend statewide. What are the law’s limitations? The text of the law expressly limits its scope in a number of ways. For example, a commercial lease is a legal document that requires certain duties of both tenants and landlords. The law prohibiting commercial rent control does not relieve either party of the obligation to fulfill his or her duties under the terms of the agreement. Additionally, if a tenant wishes to sublet the property and the landlord allows it, the law does not prevent the landlord from establishing the price required of the sublessee expressly in the commercial lease.

Residential rent control is a cap on the amount of money a landlord can charge tenants per month to lease a living space. It is beneficial for residential tenants because it prevents their rent from increasing to something more than they can afford. However, what is beneficial in residential real estate can be detrimental to commercial real estate. Approximately 30 years ago, the California legislature recognized the potential statewide adverse economic effects of commercial rent control. Therefore, it passed a law prohibiting any public entity from enacting or enforcing it. Why is commercial rent control detrimental? SF Gate explains why commercial rent control is not beneficial. The businesses that receive the benefit of commercial rent control have an unfair advantage over their competitors. This discourages competition among businesses, and the open market suffers as a result. Why is a statewide prohibition on commercial rent control necessary? According to the California Civil Code, even if only one community were to enact commercial rent control, the economic impact would extend beyond its borders. The resulting economic drain could extend statewide. What are the law’s limitations? The text of the law expressly limits its scope in a number of ways. For example, a commercial lease is a legal document that requires certain duties of both tenants and landlords. The law prohibiting commercial rent control does not relieve either party of the obligation to fulfill his or her duties under the terms of the agreement. Additionally, if a tenant wishes to sublet the property and the landlord allows it, the law does not prevent the landlord from establishing the price required of the sublessee expressly in the commercial lease.

As someone who works in construction, you may have recently had a client ask you for an escrow holdback agreement. This can occur whether you are building new construction or providing renovation and repair services. If you are not yet familiar with escrow, it is when a neutral third party holds money pending a specified outcome. A common example of using escrow is in the purchase or sale of a house. The “what” and “when” of escrow holdback agreements An escrow holdback is an agreement to withhold a portion of funds until the contractor completes the work. Parties may enter into this type of arrangement under a variety of circumstances. Applicable situations may include when someone agrees to buy a home that is still under construction, in preparation for renovating a home or for contracting with repair professionals. For example, if a client wishes to build a new home, the significance of this investment may make the client particularly cautious about the companies they hire. If you agree to escrow holdback, it may incentivize the client to pick your company over the competition, because you effectively agree that you only get paid in full if you follow through. The “why” and “how” of these agreements Prospective clients want confidence that the company they hire will properly manage and apply the money they are investing. To achieve that, clients may employ a variety of methods for safeguarding their financial investment, such as verifying contractors’ licenses or reviewing complaints and ratings on consumer reporting sites. An escrow holdback agreement may be among the safeguards a client requests, as it may provide the client with more confidence that they are hiring a legitimate and honest business. All parties involved — including the lenders, if any — must mutually consent to an escrow holdback agreement. Therefore, you have the right to participate in negotiating terms that are equitable.

As someone who works in construction, you may have recently had a client ask you for an escrow holdback agreement. This can occur whether you are building new construction or providing renovation and repair services. If you are not yet familiar with escrow, it is when a neutral third party holds money pending a specified outcome. A common example of using escrow is in the purchase or sale of a house. The “what” and “when” of escrow holdback agreements An escrow holdback is an agreement to withhold a portion of funds until the contractor completes the work. Parties may enter into this type of arrangement under a variety of circumstances. Applicable situations may include when someone agrees to buy a home that is still under construction, in preparation for renovating a home or for contracting with repair professionals. For example, if a client wishes to build a new home, the significance of this investment may make the client particularly cautious about the companies they hire. If you agree to escrow holdback, it may incentivize the client to pick your company over the competition, because you effectively agree that you only get paid in full if you follow through. The “why” and “how” of these agreements Prospective clients want confidence that the company they hire will properly manage and apply the money they are investing. To achieve that, clients may employ a variety of methods for safeguarding their financial investment, such as verifying contractors’ licenses or reviewing complaints and ratings on consumer reporting sites. An escrow holdback agreement may be among the safeguards a client requests, as it may provide the client with more confidence that they are hiring a legitimate and honest business. All parties involved — including the lenders, if any — must mutually consent to an escrow holdback agreement. Therefore, you have the right to participate in negotiating terms that are equitable.

Whether you are looking for property to set up business or you have commercial property that you wish to rent out, it is helpful to understand how commercial leases work. Commercial leases are beneficial for many types of businesses, as they allow owners to save capital and put more into their business. Furthermore, the terms of commercial leases are negotiable and may vary from contract to contract. In California, and in many other states in the nation, there are different types of commercial leases. It is important to understand what types of lease best meets your needs. Choosing the wrong types of agreement may cause serious repercussions for landlords and clients alike. Understanding property expenses Commercial leases differ depending on how they handle property expenses, including property insurance, real estate taxes, and common area maintenance charges. Common area maintenance charges are placed on top of the base rent and involve items, such as landscaping, parking lot maintenance, snow removal and other management expenses. Types of commercial leases While commercial leases vary depending on the specific terms negotiated between the landlord and tenant, most fall under these general types: Net lease: The tenant is responsible for taxes, insurance and maintenance costs. Double net lease: The tenant is responsible for taxes, insurance and rent. Triple net lease: The tenant is responsible for all property expenses, including any unexpected expenses. Gross lease: The landlord is responsible for all property expenses. Modified gross lease: Both the landlord and tenant split property expenses based on agreements. It is important to keep in mind that commercial leases have fewer legal protections when compared to residential lease agreements.

Whether you are looking for property to set up business or you have commercial property that you wish to rent out, it is helpful to understand how commercial leases work. Commercial leases are beneficial for many types of businesses, as they allow owners to save capital and put more into their business. Furthermore, the terms of commercial leases are negotiable and may vary from contract to contract. In California, and in many other states in the nation, there are different types of commercial leases. It is important to understand what types of lease best meets your needs. Choosing the wrong types of agreement may cause serious repercussions for landlords and clients alike. Understanding property expenses Commercial leases differ depending on how they handle property expenses, including property insurance, real estate taxes, and common area maintenance charges. Common area maintenance charges are placed on top of the base rent and involve items, such as landscaping, parking lot maintenance, snow removal and other management expenses. Types of commercial leases While commercial leases vary depending on the specific terms negotiated between the landlord and tenant, most fall under these general types: Net lease: The tenant is responsible for taxes, insurance and maintenance costs. Double net lease: The tenant is responsible for taxes, insurance and rent. Triple net lease: The tenant is responsible for all property expenses, including any unexpected expenses. Gross lease: The landlord is responsible for all property expenses. Modified gross lease: Both the landlord and tenant split property expenses based on agreements. It is important to keep in mind that commercial leases have fewer legal protections when compared to residential lease agreements.

As a property owner, you may eventually face a landlord and tenant dispute. While no one wants to handle this type of dispute, it is common for property owners to have to deal with it. Odds are, you will have to eventually. If you must evict a tenant, you need to ensure that you do so legally to avoid any tenant disputes, explains Forbes. What is legal eviction? When you decide to evict a tenant, you must ensure that it is legal. An illegal eviction includes changing the locks without notice, shutting off utilities or throwing the tenant’s personal belongings in the trash. To perform a legal eviction, you must have a legal reason to evict said tenant. For instance, you can evict a tenant for failure to pay rent, for damage to the property, for threats or law-breaking behavior. If you do not perform a legal eviction then the tenant may have grounds to dispute the eviction. You cannot evict a tenant for minor disagreements, because of personality differences or any other annoyances. What is the eviction process? The eviction process is relatively standard. Once you have a legal reason to evict a tenant, you would notify said tenant about his or her eviction. The notice asks the tenant to fix the violation or to move out of the residence. It is crucial that the landlord do everything possible to notify the tenant. Once the eviction moves forward, you would file the violation with the court. Next, is the court heating and if the judge rules in your favor, then you will regain possession of your property.

As a property owner, you may eventually face a landlord and tenant dispute. While no one wants to handle this type of dispute, it is common for property owners to have to deal with it. Odds are, you will have to eventually. If you must evict a tenant, you need to ensure that you do so legally to avoid any tenant disputes, explains Forbes. What is legal eviction? When you decide to evict a tenant, you must ensure that it is legal. An illegal eviction includes changing the locks without notice, shutting off utilities or throwing the tenant’s personal belongings in the trash. To perform a legal eviction, you must have a legal reason to evict said tenant. For instance, you can evict a tenant for failure to pay rent, for damage to the property, for threats or law-breaking behavior. If you do not perform a legal eviction then the tenant may have grounds to dispute the eviction. You cannot evict a tenant for minor disagreements, because of personality differences or any other annoyances. What is the eviction process? The eviction process is relatively standard. Once you have a legal reason to evict a tenant, you would notify said tenant about his or her eviction. The notice asks the tenant to fix the violation or to move out of the residence. It is crucial that the landlord do everything possible to notify the tenant. Once the eviction moves forward, you would file the violation with the court. Next, is the court heating and if the judge rules in your favor, then you will regain possession of your property.

Mold is a natural fungus that thrives in moist environments. It is not uncommon for mold to grow in areas of the home, such as in bathrooms, beneath the sink or in basements. Though molds are not poisonous in and of themselves, some do product mycotoxins, which can exacerbate certain health conditions. Almost all molds, if not remediated quickly, can cause significant property damage. For these reasons, California has passed laws that protect tenants against untreated mold growth. Landlord liability in California According to SFGate, landlords have a legal liability to keep their rental properties “habitable” for tenants. Habitability requirements extend to all aspects of the unit, from the air-conditioning to the electricity to the roof and everything in between. This means that landlords must ensure that their properties are structurally sound and that they do not contain cracks, leaks or any other issues that could lead to excess moisture. The theory behind these laws is that if a landlord follows them to a T, he or she can prevent mold growth. If, however, a landlord fails to abide by these laws and, say, fails to repair a leaking roof, a tenant can sue for mold damage and probably win. If, however, the tenant’s behavior is responsible for the mold growth, such as failing to clean up a spill in the kitchen, the courts will unlikely hold the landlord liable for ensuing damage. Local regulations Jurisdictions within California have the freedom to enact their own mold laws and regulations as well. San Francisco, for example, considers mold a “legal nuisance.” This means that the city can sue the landlord for failing to clean up mold, just like it can sue landlords and homeowners for leaving piles of trash lying around or for allowing a rat or roach infestation to continue.

Mold is a natural fungus that thrives in moist environments. It is not uncommon for mold to grow in areas of the home, such as in bathrooms, beneath the sink or in basements. Though molds are not poisonous in and of themselves, some do product mycotoxins, which can exacerbate certain health conditions. Almost all molds, if not remediated quickly, can cause significant property damage. For these reasons, California has passed laws that protect tenants against untreated mold growth. Landlord liability in California According to SFGate, landlords have a legal liability to keep their rental properties “habitable” for tenants. Habitability requirements extend to all aspects of the unit, from the air-conditioning to the electricity to the roof and everything in between. This means that landlords must ensure that their properties are structurally sound and that they do not contain cracks, leaks or any other issues that could lead to excess moisture. The theory behind these laws is that if a landlord follows them to a T, he or she can prevent mold growth. If, however, a landlord fails to abide by these laws and, say, fails to repair a leaking roof, a tenant can sue for mold damage and probably win. If, however, the tenant’s behavior is responsible for the mold growth, such as failing to clean up a spill in the kitchen, the courts will unlikely hold the landlord liable for ensuing damage. Local regulations Jurisdictions within California have the freedom to enact their own mold laws and regulations as well. San Francisco, for example, considers mold a “legal nuisance.” This means that the city can sue the landlord for failing to clean up mold, just like it can sue landlords and homeowners for leaving piles of trash lying around or for allowing a rat or roach infestation to continue.

Under the Fair Housing Act, property owners cannot discriminate against you based on your disability. Most often, when people think about the Fair Housing Act, they think about it in reference to being offered or declined housing. For instance, if you meet with your landlord in person and he or she suddenly has a change of heart about allowing you to rent, it could be a case of discrimination. What if you already have a place? Can you still suffer discrimination? Can a landlord refuse your need for accommodations? What are reasonable accommodations? An accommodation is a change to the policies or rules that a landlord has for his or her property. Reasonable accommodations are changes that provide the tenant with the ability to enjoy the dwelling and the common spaces equal to others. In some cases, a landlord may even provide reasonable modifications. These are structural modifications so that a person can enjoy the housing and facilities. Can landlords refuse reasonable accommodations? If a landlord refuses your reasonable accommodations, then this is an example of discrimination. Some reasonable accommodations might include a ramp or grab bar installation. If you have a service animal, you may require a waived pet deposit fee. If there is a strict no pets policy, the property owner cannot say no based on your animal or have your pet kicked out. You should never have to face additional fees or extra rent based on these accommodations. The law states that the property owner has to provide what is necessary for you to enjoy the property in its entirety.