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. 

Posted in Real Estate Litigation | No Comments »

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. 

Posted in Commercial Leases | No Comments »

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.

Posted in Real Estate Litigation | No Comments »

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.

Posted in Real Estate Litigation | No Comments »

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.

Posted in Real Estate Litigation | No Comments »

No landlord looks forward to evicting a tenant. The legal process associated with eviction costs both money and time, especially if the tenant disputes your claims. You will also need to find a new tenant to occupy the property, and it can take time to find an ideal candidate. 

However, there are times when eviction is unavoidable. If you are not making any headway with tenant relations and losing money on your investment in the process, it is important to pursue eviction in the appropriate manner. Here are a few things to keep in mind when dealing with a tenant dispute. 

Reasons for eviction in California 

According to the Judicial Branch of California, certain situations permit a landlord to legally pursue the eviction process. Illegal activities on the property are a pretty obvious violation of one’s lease agreement, but there are also lesser actions that violate the lease. For example, keeping pets on the property when prohibited can result in an eviction. Causing damage or making major renovations may also be considered a violation depending on what is contained within the lease. Late or missed rent payments are another common reason that landlords seek eviction. 

Steps to take when pursuing an eviction 

The tenant must be notified prior to legal action being taken. The notice should be detailed as to the reason you are pursuing eviction. Next, paperwork must be filed at the appropriate court for your jurisdiction. The tenant will have a certain period of time in which he or she can respond or vacate the property. If your claims are disputed or the tenant fails to respond, you can then request a court date. At court, the judge will hear both sides of the case and render a decision. If the decision is in your favor and the tenant still refuses to move, a sheriff will assist you. 

Posted in Real Estate Litigation | No Comments »

Whether renting office spaces or apartments, property owners have an obligation to ensure the safety of their properties for tenants’ use. While they may easily identify and resolve some potential hazards, such as a stairwell in ill-repair, property owners may not spot other dangers as effectively.

To protect themselves and their tenants, it may help for property owners to understand the danger posed by asbestos and their liability for any adverse health effects exposure to asbestos in their buildings may cause.

What is asbestos?

According to the National Cancer Institute, asbestos refers to a group of minerals occurring naturally as bundles of fibers. These minerals have been put to use commercially and industrially in the manufacture of construction, shipbuilding and automotive materials. For instance, prior to the U.S. Environmental Protection Agency’s ban on the new use of asbestos, these fibers were used in cement, roofing, floor tiles, paints and insulation products.

What are the health effects of asbestos exposure?

When inhaled, asbestos fibers may accumulate and cause inflammation and scarring in the lungs. People may experience symptoms such as shortness of breath, a persistent cough, difficulty swallowing, loss of appetite, and swelling of the face or neck, among other effects. Additionally, asbestos exposure may contribute to the development of certain types of cancer, as well as asbestosis and mesothelioma. Often, people may not experience symptoms or notice the effects of asbestos for years after their exposure.

Can renters take legal action?

According to FindLaw.com, people who believe they were exposed to asbestos in their homes and as a result became ill may have grounds for legal action. In order to recover compensation for asbestos exposure based on property owner negligence, people must show that the owner knew about and had a duty to disclose the presence of asbestos in the home but failed to do so. Further, they must prove that their illness was caused by asbestos exposure. Tenants in such cases may pursue compensation for the damages resulting from their illnesses, including pain and suffering, current medical expenses and the costs of future medical care, lost income and reduced earning capacity.

Posted in Real Estate Litigation | No Comments »

When you own commercial apartment or home rentals, you are responsible for following state, local and federal laws for tenant screening. Failure to do so can result in an expensive lawsuit. 

These are the key regulations for fair tenant screening in Los Angeles. 

Discriminatory questions 

In a rental application, you may ask a tenant to provide: 

• His or her monthly income 
• Employment information 
• Financial information to prove he or she can pay the monthly rent 
• The number of family members who will live in the unit 

Federal law prohibits landlords from asking questions about: 

• Race, ethnicity or religion 
• Gender or sexual orientation 
• Ancestry or national origin
• Marital or familial status 
• Source of monthly income 
• Disability or health status 
• Age of individuals who will live in the household 
• Citizenship or immigration status 

Deciding not to rent to a tenant based on any of these factors constitutes discrimination. 

Application fees 

California law limits landlords to a set amount per adult for a tenant application fee. The state updates the maximum fee to adjust for cost of living each year. If two adults want to rent a unit, you can charge twice the limit on the application fee to cover the cost of credit and background checks for both. 

If you decide not to rent to potential tenants based on their credit, you must give them a copy of the report you used. Landlords must provide a receipt for the cost of credit and background checks plus reasonable time spent to obtain these items. 

Required application elements 

If you plan to perform background checks on potential tenants, you must get explicit permission to do so in writing. Ask this question as part of the rental application and require the applicant to sign that section. 

Using a tenant screening application that does not comply with state law can result in federal fines and potential discrimination lawsuits. A legal review can ensure that your screening process complies with Los Angeles and California law. 

Posted in Real Estate Litigation | No Comments »

In California, tenants and landlords across the board must have a working relationship. It is important for both parties to coexist in peace. Unfortunately, as humans, disputes are an inevitable part of life.

But because you have a dispute with a tenant, that does not mean you must take it to court right away. Today we will look at some alternative dispute resolution methods. You may find one of them useful in solving your own disputes.

Deciding if you can avoid litigation

It is important to note first that some situations do need litigation. Sometimes an argument becomes too vitriolic. Sometimes a tenant refuses to budge or even becomes aggressive. In situations where this happens, you may have no choice but to take them to court. Preparing for this possibility can help.

Utilizing mediation tactics

In other cases, you can settle matters through communication. Sometimes but rarely, parties in conflict are able to come together and talk things out on their own. If that fails, it does not mean you are out of options. You can bring on a third party mediator to help. Mediators are not judges and do not have the binding power of a court. But they can help parties reach agreeable conclusions without judge involvement. They facilitate safe and healthy discussion and help defuse tense situations.

If you want to read more about disputes between landlords and tenants, visit our linked webpage. It discusses landlord-tenant disputes. This includes how these disputes happen and what you can do to combat them. You can use knowledge learned to prevent other disputes from happening in the future.

Posted in Real Estate Litigation | No Comments »

In recent weeks, many people across the U.S. have lost their jobs. This often results in financial strain, such as the inability to pay bills, including rent. As a landlord, there are a host of factors to take into consideration when it comes to back rent, especially if a dispute with your tenant surfaces. It is critical to handle these matters with care and ensure that you identify the most appropriate course of action. 

Resolving disagreements 

Sometimes, landlords are able to resolve these disputes by working out an agreement with their tenants. For example, a tenant facing temporary financial hardships is sometimes able to set up a payment plan or convince their landlord that they will get caught up soon. In other instances, tenants simply refuse to cooperate, placing landlords in a tough position. Some tenants are very bitter and hold a grudge against their landlord, making communication very difficult (if not impossible). 

Eviction 

In some instances, evicting a tenant is necessary. Our law firm fully realizes the myriad of legal, financial and emotional considerations that arise with respect to the eviction process. If you have no choice but to evict your tenant, it is imperative to prepare for what lies ahead and have a firm understanding of your rights as a landlord. These situations not only generate a lot of stress but are often very time-consuming. However, taking a smart approach often increases the odds of a successful outcome while minimizing legal complications. Explore our website to read more about evicting a tenant and other legal topics that affect landlords. 

Posted in Firm News | No Comments »