Whether you rent property to a commercial tenant or you are a residential landlord, housing discrimination is a topic you need to understand. Landlords have rights and responsibilities, and every year, many face harsh repercussions due to discrimination complaints.

Sometimes, landlords do not realize that certain actions are against the law. If you are in the middle of a discrimination complaint or you want to avoid breaking any laws, take a closer look at this issue.

What are some examples of housing discrimination?

On their website, the California Department of Fair Employment and Housing outlines multiple examples of unlawful housing discrimination. According to the DFEH, landlords cannot legally discriminate against tenants and prospective tenants based on their racial background, age, immigration status, gender or religious views.

Landlords who refuse to rent to a protected individual on the basis of these attributes or provide unfair terms in rental agreements sometimes face charges, as well as those who terminate a rental contract because of a tenant’s race or gender. Sexual harassment and retaliation against a tenant who files a complaint are also against the law.

What are the consequences of housing discrimination accusations?

Housing discrimination can result in legal costs, civil penalties and fines related to the emotional toll of discrimination. Moreover, tenants who are able to successfully work through a housing discrimination case are also entitled to housing that a landlord denied, in some instances. Aside from the financial impact of housing discrimination charges, these cases often carry a heavy emotional toll and lead to significant damage with respect to a landlord’s reputation.

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A California real estate partnership may offer many advantages, and particularly if you need to expand your access to resources, capital and related opportunities. Embarking on a real estate partnership also involves inherent risk, though. It is important that you take steps to minimize these risks and protect your interests as much as possible.

According to Medium, there are several tactics you may want to employ to protect yourself when establishing a real estate partnership. Some recommended steps are as follows.

Establish a limited liability company

If you have equity in an investment property, consider creating an LLC and then transferring the title of the property to it. Why? Doing so helps protect your home or other personal assets in the event that someone attempts to hold you liable or files a judgment against you.

Say, for example, that a tenant suffers a serious injury as a result of the conditions at your investment property. Having an LLC shifts the liability away from you personally, thereby protecting your personal assets.

Determine who holds what roles

When entering into a real estate partnership, be sure to be clear about roles and expectations. Determine who is going to be active in the partnership and whether any silent partners exist. Clarify, too, who holds decision-making authority when it comes to your investments, and when. It also may serve you well to determine how long you want to the partnership to last.

Taking time to make these considerations before disputes arise helps protect your assets and interests and may, too, save you substantial money in the long run.

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With the shift to remote work, many office buildings are currently sitting empty. This is likely to change over time, but some studies indicate that companies are not planning to return to full office use.

PwC has conducted extensive surveys to learn what businesses expect their next move to be and how their use of commercial real estate may change in the future.

Survey statistics

Only 13% of the executives who participated said they would go fully remote and forgo the office entirely. Employees also believe that the office plays two important roles: team collaboration and relationship-building. As far as maintaining company culture, the largest percentage of executives in the survey, 29%, said three days per week was probably sufficient.

While 87% of executives plan to change their real estate strategies during the next year, not all of them are thinking of downsizing. In fact, 56% believe they will need more office space, not less.

Functions and locations

Forbes explains that whether they downsize or increase their office spaces, many companies are rethinking how to maximize their use. Companies that plan to maintain a location have quite a few options. For example, they may have core offices and coworking spaces, and/or they may use flex space and virtual offices. Considerations include the purpose of the space and how often employees need to be there and why.

To meet their new needs, companies anticipate looking for geographically dispersed locations for client-engagement hubs and collaborative sessions. This could translate to fewer individual offices and more meeting rooms in many locations.

Commercial real estate owners may need to become more flexible with their lease options and invest in a wider range of office spaces and configurations to draw in these companies.

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As someone who may not be familiar with commercial leases, you may encounter terms that confuse you.

It is important to not only read over your commercial lease but to also lookup unfamiliar terms to understand the agreement you are about to enter.

Gross Leases

According to FindLaw, gross leases are a very specific type of commercial lease that lays out requirements for both you and your landlord. Like with flat or fixed leases, you must pay a predetermined amount for rent. In a gross lease, however, there may be a clause that allows the landlord to increase that rent once a year.

Typically, the landlord is responsible for the operating costs of the unit. This may or may not include utilities such as heat, cooling and electricity.

Net leases

Net leases allow landlords to increase the rent when they occur an increase in their costs as opposed to waiting once a year. Per this type of commercial lease, you will usually pay a portion of the expenses in addition to the rent. Under some net leases, you may also be responsible for paying up to the full amount of real estate taxes.

Step leases

Step leases combine some elements of both gross and net leases. Rent increases occur once a year and are meant to offset the landlord’s increase in expenses. Whereas rental increases under a net lease are based on realized increases, step leases include raises based on estimated increases instead.

Cost-of-living leases

As the name suggests, cost-of-living leases increase rental costs based on the cost of living. As the cost of living increases, your rent will increase as well.

Being sure to understand your lease requirements before you sign can help you avoid problems in the future.

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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.

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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.

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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.

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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. 

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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.

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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.

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