Pretty much every American dreams about owning their own home. Unfortunately, not everyone has the money to purchase their dream home outright. This is where mortgages come in. And mortgage debt is, without a doubt, one of the most substantial debts in America.

However, it is not uncommon for a homeowner to experience financial hardships before clearing their mortgage debt. When this happens, they may fall behind on their mortgage payments.

Understanding mortgage default

Basically, mortgage default happens when you fail to make mortgage payments when they become due. A homeowner can default on their mortgage when they are unable to afford the payments or when they no longer want to own the home.

A homeowner can also default on their mortgage payment under the following circumstances:

• If they fail to adequately insure their home
• If they fail to occupy the home as outlined in the mortgage terms
• If they transfer home ownership to another party without notifying the lender

So what happens when you default on your mortgage payments?

Regardless of the reason, defaulting on your mortgage comes with a number of consequences. Here are some of them:

• Foreclosure and eventual eviction – Your mortgage lender can claim back the home through a foreclosure process if you fail to reach an agreement on your mortgage payment.
• Late fee penalties — subject to your mortgage terms, the lender may impose late fee penalties on you
• A damaged credit score – defaulting on your mortgage can negatively hurt your credit score. And this damage can remain on your credit report for a long time making it difficult for you to obtain credit in the future.

Defaulting on your mortgage and the resulting consequences can be a scary prospect. Knowing your legal options can help you protects your rights if you have defaulted on your mortgage payments.

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Sooner or later, growing businesses and companies either need to open additional locations or move into a larger space. Sometimes, they may even need to do both simultaneously.

If you have only operated in one location, you must decide whether to lease or purchase your new property. Since both options present advantages and drawbacks, weighing their pros and cons may help you decide.

Purchasing commercial property

A top benefit of buying space over leasing it centers on its potential for future value. When well-maintained, most commercial properties appreciate, becoming more valuable over time. Among the other benefits of buying a property are:

• Possible tax breaks
• Control over the property
• Income increases from renting out space

There are downsides to buying. For example:

• Financing difficulty
• Large down payment
• Requires liability insurance

You also risk facing prepayment penalties if you want to pay your business debt off early.

Leasing commercial property

Many companies prefer commercial leases for their property needs. One reason for this is that it requires fewer upfront costs since you don’t have to make a down payment.

Here are some other advantages of commercial leases:

• Freedom to exit lease and property
• Expenses are relatively fixed
• Possible tax breaks

The potential disadvantages of leasing space include the following:

• No rewards for property appreciation
• No control over the property
• No extra rental income

Further, you can expect expensive monthly rent payments and associated costs that could exceed the expenses required when purchasing.

Before you decide, it’s wise to learn more about California commercial real estate leases and transactions. Taking this proactive step can help you avoid many legal hurdles that could delay or change your plans.

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In recent years, there has been a lot of confusion about the blurry line between emotional support animals and actual service animals. Emotional support animals are often pets with very little, if any, formal training. On the other hand, service animals receive months, if not years, of professional training so that they can perform specific medical functions in public and private settings alike.

The Americans with Disabilities Act (ADA) has always required that landlords accommodate service animals that perform medical functions, but emotional support animals were a gray area. California lawmakers recently changed that. They enacted a law that gives anyone with an emotional support animal the right to rental accommodations.

Does that mean that your tenants can now all have their own pets?

There are rules that apply to emotional support animals

Emotional support animal certificates or letters are available for purchase online for just a few dollars. Many tenants who want to get a pet of their own while subject to lease restrictions including pet rent and deposits or those who want to rent a unit in a building that is typically animal-free may purchase some questionable certificate online. The prevalence of bad-faith actors in the emotional support animal market should give you an idea of how questionable some of these certificates or letters may be.

A tenant asking you to accommodate an emotional support animal should have a letter from a California-licensed mental health professional. The professional needs to have maintained that relationship for at least 30 days before writing the letter and have proof of adequate clinical documentation to support their claim that the tenant requires an emotional support animal.

However, before you take any action, investigation is crucial. A mistake in judgment on your part could violate a tenant’s or prospective tenant’s rights.

Disability accommodations can be a tricky area of real estate law

Landlords often have a hard time making sense of their obligations to tenants under both federal and California state statutes. Given how the laws are constantly in flux and how violations of certain laws could lead to financial penalties, it is crucial that you ensure compliance with anti-discrimination and accommodation laws when making property decisions.

Getting accurate legal advice when handling a complex real estate matter can help you protect your property and minimize disputes with your tenants.

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Real estate developers have a hard job. Property investing is an expensive industry that requires putting a lot of money at significant risk. Developing a property to turn a profit takes time, effort, and most of a person’s attention. So, when legal disputes arise, they often seek the help of an experienced commercial real estate attorney.

Working with a lawyer knowledgeable of California property laws helps investors and developers get ahead of legal issues before they happen. With proper preparation, a lawyer can help their client avoid these common real estate disputes.

The Most Common Real Estate Disputes

Commercial developers will likely see more than a few legal disputes during their careers. Between issues with tenants, zoning, state and federal regulations, and taxes, many organizations with a vested interest in California real estate transactions. Developers often seek legal counsel when facing these common disputes:

• Boundary disputes. When a property changes hands, property lines can become confused. Property inspectors may have different approaches to locating borders, which can cause disagreements between owners.
• Easement usage disputes. Many properties have easements against them, designating certain areas or landmarks for shared or public use. Developers may have to take action to enforce, remove, or create easements.
• Land Use Approval. Commercial use properties are subject to commercial zoning laws but are not set in stone. A business may appeal to the zoning board to allow the variance or secure a conditional use permit. The best way to succeed here is by garnering public support for the adjustment.
• Partition Actions. Sometimes, when seeking to purchase a property, developers must negotiate with multiple owners, like with inheritors of a family estate. Though one party may agree to sell, the others may require legal action before they comply.
• Contract Violations. Developers must understand several different types of property contracts. Agreements between landlords and tenants, sellers and buyers, developers and construction firms revolve around comprehensive and often complex contracts. Finding a speedy resolution to these issues can be vital for an enterprise’s success.

A local attorney with experience in California real estate will not only help developers and investors resolve these issues but prevent them from ever occurring in the first place.

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You and your neighbor have always gotten along. You see each other at neighborhood block parties and wave when you roll out your trash containers to the curb. Despite the positive relationship, a conflict could arise over your shared property line. 

If your neighbor has a different idea than you do about where the boundary between your property falls, the two of you could find yourselves caught up in the boundary dispute. What are some of the common reasons that boundary disputes arise? 

There are issues with property improvements

Perhaps the discrepancy in your ideas about the boundary line came to light when your neighbors started putting out markers for a new shed or an expansion to their existing house. You quickly realize that they intended to build over the property line onto your land and pointed that out to them. 

Unless you resolve the matter before construction starts, their actions could eventually compromise your ownership rights to the section of land in dispute. You may have to establish and enforce the boundary before the project moves forward. 

A property transfer is imminent

People often take for granted that they understand where their property begins and ends until they need to list the property for sale. Buyers often have a vested interest in knowing the exact shape and size of a parcel, especially if they intend to put up fencing or expand the property in some way. 

If a neighbor has brought people onto your property while showing their home, you may need to clarify the boundaries so that there won’t be a conflict with your new neighbor. 

Taking swift action to resolve boundary disputes will help you protect the investment you have made in your home.

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One of the hardest elements to find agreement on in landlord-tenant law is sometimes the ordinary wear and tear of rental property. If the property owner and those living in the unit disagree on normal wear and tear, it can lead to landlord-tenant disputes involving security deposits.

Unfortunately, it can be difficult to determine whether there was more than normal wear and tear in rental properties, especially when the tenant has lived there for a long time. Landlords must often rely on their knowledge and documentation of the property before the tenancy when identifying possible damage.

An example

When your tenant moves out, you inspect the property and notice carpet damage. You believe the tenant’s dog chewed the two-year-old carpeting in front of the door and several other spots where it is threadbare or absent completely. A two-year-old carpet would likely remain in good condition without misuse.

However, you took photos of the home, including the carpet, before the tenant moved in. Your photos confirm your belief that the carpet was not damaged when the tenant took occupancy. Under these conditions, you could probably withhold a portion of the deposit to cover the carpet damage.

Types of ordinary wear and tear

Some of the property issues that can develop due to normal wear and tear include:

• Scuff marks on flooring
• Warped window and door frames
• Loose floor tile grout
• Faded or worn carpet

Always document the condition of your rental properties before a new tenant moves in. A record of your property conditions helps you avoid landlord-tenant disputes. It also provides you with a means to track damage and make repairs or replacements of affected areas as needed.

Becoming more familiar with California landlord-tenant laws is also an effective way to prevent potential disputes with your tenants.

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There are countless benefits offered by forming a real estate partnership. However, there are also potential downsides if you aren’t careful.

Protecting yourself in the partnership should be a top priority, and some tips that will help you do this can be found here.

Choose the right partner

You need a partner who complements your abilities. To determine who will suit this role, you need to know what your strengths and weaknesses are. Take time to conduct a self-evaluation, so you know what you are looking for in a partner.

Outline the role and expectations of each partner

A partnership will only be successful if you take the time to outline the role of each person and what is expected. This is the information you should include in a partnership agreement. Some of the specific things that your partnership agreement should include are:

• Who is responsible for the finances?
• Who is responsible for marketing?
• Who will negotiate the deals?

It’s important to outline the role of each partner in any possible scenario that arises. This is going to ensure that both parties know what their roles are and reduce the possibility of disputes.

Keep things simple

While it’s important to be detailed and specific, you don’t need to go overboard. The goal is to have a successful real estate partnership, which means knowing your role, handling your responsibilities and trusting your partner to do the same. Don’t be overly strict with what should happen on a day-to-day basis, as this can lead to bad blood in the partnership.

Establishing a real estate partnership

When you partner with someone to invest or purchase real estate, it can be a beneficial situation. However, you have to take steps to protect yourself and your interests along the way.

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Whether you primarily execute contracts with new employees as you hire them or with clients as they hire you, including the right terms is key. A well-drafted contract will increase the benefits your business derives from the agreement while also protecting you from future issues and losses.

Often, the main focus in contracts will be the obligations that each party will have to one another, including financial obligations and timing expectations. However, it is also important to think about what will happen if a conflict arises in the future.

You can address contract disputes before they occur

For decades, big businesses have added mandatory, binding arbitration clauses to their contracts to prevent any issues from going to court. In recent years, businesses have started to shy away from dispute resolution clauses, possibly because of the negativity around mandatory binding arbitration requirements. Customers and employees alike may avoid signing contracts that limit their right to take legal action or force them into binding arbitration.

Your organization can limit contractual conflicts without making itself look bad by forcing every employee or client into mandatory arbitration when problems develop.

You have options for conflict resolution

The problem with mandatory, binding arbitration is that it takes all choices away from the other party. They don’t have any choice about how to resolve the issue or any way to fight back if they don’t agree with the outcome.

A good workaround may be a clause requiring that they attempt mediation or arbitration with your company at their discretion prior to initiating legal proceedings. That way, both parties have an opportunity to sit down and discuss matters outside of court. Additionally, you don’t have to worry about start worrying your relationship with prospective employees and clients including terms that they find frightening.

Including dispute resolution suggestions or requirements in your contracts helps you to facilitate settlement when there is a disagreement between you and another party. Although many business contract disputes settle before their day in court, even having a pending court case can do damage to your reputation.

Integrating the right protections into your business contracts now will help your business minimize what disputes arise and how expensive they will be for you to resolve.

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Some who earn a living by investing in real estate prefer to work alone, often to minimize liability. Other times, investors discover they need additional resources to maximize their success. They meet this need by forming real estate investment partnerships.

A partnership offers many advantages. It spreads the financial risks among its members (instead of just you) and gives you potential access to capital. However, finding the right partner is just the first step. You must also ensure the partnership succeeds while protecting your interests.

1. Build long-lasting relationships

You may discover that you need different partners for different property investments. Each time you enter a partnership, work on building good working relations. If you want to partner with a past investor once more, having a good relationship foundation can facilitate future partnerships.

2. Have clear-cut agreements

Ensure your investment partnership agreements and contracts clearly identify each partner’s roles and responsibilities. It is also a good idea to include an exit strategy in each of your investment agreements. Having clear-cut terms benefits all involved parties.

3. Plan for adversity together

Even if you have a solid partnership agreement, initiate discussions about possible adversity with your investment associates. These conversations ensure you are on the same page if a deal fails or other misfortunes arise.

4. Get professional guidance

You will benefit from legal counsel even if your partnerships are amicable and function well. Such guidance helps all involved parties by ensuring compliance with the legal requirements of your investments.

Familiarizing yourself with the laws surrounding California real estate investments and partnerships can also strengthen your property deals. Examples of topics to learn more about include tax complexities, risk management and adequate insurance coverage.

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A company recently expressed renewed interest in building a luxury residential development in California. However, it has received resistance from the council of the city in which it wishes to build, as the development would be built on an area considered to be environmentally sensitive. The company, therefore, recently decided to file a legal claim against the municipality. If people in Los Angeles or other parts of the Golden State are unable to resolve a real estate dispute on their own, it is within their rights to take legal action.

In this California case, the company that wants to build a development had planned on creating one with 79 homes. The homes would be built on more than 40 acres of land. The potential site is essentially undisturbed desert.

In addition to suing the city for rejecting its building proposal, the company claimed that it had paid a whopping 150 percent of the fees required to get particular documents processed quickly in connection with the possible development. However, the company allegedly ended up receiving no preference. However, city officials as well as residents near the potential development site claimed that the design of the project did not meet the city’s quality standards.

The company claimed that if its development cannot move forward, its property will be devalued by more than $4 million. As part of its lawsuit, the company is seeking for the court to permit it to continue with the development. It is also seeking the repayment of its legal costs. It is within the rights of a person in Los Angeles who is involved in a real estate dispute with city officials or with another company to fight for his or her best interests considering the circumstances surrounding his or her case.

Source: desertsun.com, “Wessman sues Palm Springs over real estate development“, Skip Descant, Jan. 9, 2017

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