Law Articles
Options on the Table
Options to purchase real estate are back. Whether popping up in leases or in standalone agreements, options seem to be very a popular vehicle in today's real estate market, with benefits for parties on both sides of the transaction.
Arizona Foreclosure Deficiency Laws
Most homeowners in Arizona that find themselves in a foreclosure situation are facing what is called a "trustee's sale". This sale process stems from Arizona's deed of trust laws. If the home is sold at a trustee's sale and the proceeds are insufficient to cover the loan amount, the lender may choose to pusue a deficiency action. However, there are exemptions and protections under Arizona law that protect many homeowners from such liability.
Arizona Commercial Landlord Tenant Law
The Laws that govern Arizona commercial landlord tenant issues are much less comprehensive than the laws that govern residential landlord tenant issues. Commercial lease issues usually involve retail, industrial, office space, or other commercial uses. Often, these disputes are governed primarily by the lease terms themselves.
Arizona Nonprofit Corproation Act
The Arizona Nonprofit Corporation Act governs most nonprofit or not-for-profit corporations in Arizona. Such corporations often include homeowner associations (HOA's), churches or other religious institutions, charities and many more.
Arizona Residential Landlord Tenant Act
The Arizona Residential Landlord Tenant Act is the body of law that governs most residential lease issues in Arizona. This law affords residential tenants many protections and creates various procedural requirements for landlords. The Act covers rent issues, evictions, partial payment, utilities, lease termination, security deposits and much more. It is important for both landlords and tenants to follow the law because it will almost always trump the lease when there is a conflict.
Arizona Planned Community Act
There are generally two bodies of law that govern HOAs, depending on which category they fall under: Condominium or Planned Community. The Planned Community Act governs most single family detached homes in an HOA.
Arizona Condominium Act
There are generally two bodies of law that govern HOAs, depending on which category they fall under: Condominium or Planned Community. The Condominium Act governs most condominium or townhouse communities in Arizona.
Earnest Money Disputes
These days, there are many issues that can kill a deal. With the prevalence of short sales, foreclosures and other non-traditional transactions it can be very difficult for brokers to keep a deal together through closing. Buyers back out for many reasons and sometimes no reason. When they do, there may be significant earnest money in dispute. Whether the seller or buyer “breached” the purchase agreement and who is entitled to the earnest money is often hotly contested.
Title Issues Holding Up Your Transaction?
Title issues such as mechanic's liens, rogue deeds in the chain of title and adverse possession claims can hold up a transaction. It is important to properly identify the problem before a solution can be reached.
Defending Sellers in Disclosure Disputes (Things Brokers Should Know)
If a buyer of real estate believes that material information about the property was concealed or otherwise not disclosed, they could sue. Sellers of real estate often face the most exposure when a real estate deal goes bad.
Being Sued by Your Lender for a Deficiency? You May Have Defenses.
As foreclosures have flooded the Arizona housing market, we have started noticing a new trend. Banks and lenders are now suing property owners for deficiencies.
Collection Options for Broker Lease Commission
In these difficult times, real estate brokers are finding it more and more difficult to collect lease commissions from commercial landlords. But brokers have several legal options at their disposal.
Operating Expenses (Part 3) Audit Rights
This is the final blog post in a 3 part series on the negotiation of operating expense provisions in commercial leases.
Operating Expenses (Part 2) Exclusions
As stated in the previous blog entry, landlord form leases often allow the landlord to pass through all expenses in any way related to the management and operation of the project. It is important for tenants to negotiate the charges that can and cannot be passed through.
Operating Expenses (Part 1) Introduction
This blog entry is the first in a three part series on the negotiation of operating expense provisions in commercial leases.
Landlord Lien Rights on Tenant’s Personal Property
There are three primary forms of security used for tenant’s payment of rent: a security deposit (in the form of cash or a letter of credit), a personal or corporate guaranty, and landlord lien rights on the tenant’s personal property located within the leased premises. Most tenants incorrectly negotiate the landlord lien rights provisions in commercial leases.
Death and Disability Clauses (Part 2)
This is a follow up to the Article titled "Death and Disability Clauses".
Commercial Real Estate Broker Liens
As follow up to my blog entry titled “Collecting Your Leasing Commission,” this blog entry focuses on Arizona commercial real estate broker liens.
Timing of Payment of TI Allowance to Tenant
When negotiating a tenant improvement allowance, tenants (and their attorneys) often overlook a critical issue: the timing of the landlord’s payment of the allowance.
Release of Original Tenant Upon Assignment
Most commercial leases that landlords use as a standard form lease contain a provision restricting assignment of the lease by the tenant. The provision states that the tenant cannot assign its interest in the lease without the consent of the landlord, which consent may be withheld in landlord’s “reasonable discretion” or “sole discretion.”
Determination of Fair Market Rent (Part 2 of 2)
As discussed in the previous blog entry, a tenant should negotiate a renewal option with a clear, unambiguous method for determination of fair market rent. The tenant wants a neutral, well-defined calculation, appraisal or arbitration process. The tenant does not want to further negotiate with the landlord at the time of renewal, since the tenant always can negotiate with or without a renewal option.
Room for Improvement
New space being leased in any office, retail, or industrial property will need to be tailored for a particular tenant. Alternations can range from relocating interior walls or partitions to full blown construction with all the trimmings. Like most lease issues, deciding who will bear the costs associated with the build-out and how these funds will be secured are matters open for negotiation.
Determination of Fair Market Rent (Part 1 of 2)
In the current commercial leasing market, rent rates for new leases are far below rates from a few years ago. As a result, if the parties negotiate a renewal option as a term in a new lease, landlords are generally unwilling to commit to a continuation of the “low” rent rate for the renewal term (or a 2%-5% per year increase based on the initial term’s low rent rate). Regardless of your opinion on when the commercial leasing market will fully recover, most would agree that the market will look different in five years than it does today. Accordingly, parties commonly agree that the rent rate for a renewal term will be based on a determination of fair market rent at the time of renewal.
Death and Disability Clauses
If a closely-held company is entering into a lease, the company needs to consider whether it can continue to operate if a critical owner or employee dies or becomes disabled and cannot work.
“Key Salesperson” Provision in Listing Agreements
When selecting a listing agent, sellers/landlords typically base their choice on the individual salesperson that will be performing the real estate services (as opposed to the salesperson’s real estate brokerage company).
Collecting Your Lease Commission
As a result of the struggling commercial leasing market, real estate brokers that represent tenants are having difficulty collecting their leasing commissions from landlords.
Being Sued by Your Lender for a Deficiency? You May Have Defenses.
Banks and lenders are now suing homeowners for a deficiency judgment. A deficiency occurs when the home sells at a trustee's sale or foreclosure for less than what was owed. There are several defenses to a deficiency action, as discussed in this article.
Disclosure Lawsuits: Agent and Broker Liability
Realtors, Brokers and real estate agents have disclosure duties under Arizona law in real estate transactions. These duties are owed to their own clients, as well as other parties to the transaction. This article addresses some basic issues of broker liability for disclosure.
Illegal Subdivisions and Lot Splits in Arizona
The lot split and subdivision laws in Arizona are quite complex. Developers and owners must jump through several hoops to ensure that they do not create an illegal subdivision or miss a step in the platting process. This article addresses the basic issues at play in land splitting.
Trustee’s Sales and Deficiencies
With the passage and subsequent repeal of legislation that would dramatically impact Arizona’s anti-deficiency statutes, it is clear now more than ever that every owner of real property that is considering or facing a foreclosure should consult with an attorney regarding the real risks inherent with such a process. In light of the struggling real estate market in Arizona and the resultant rise in foreclosures, property owners must pay special attention to the potential for a deficiency judgment.
Lenders Can Modify Commercial Notes
Businesses and individuals that own commercial property, such as free-standing buildings, office condos and larger centers, are finding that some lenders are willing to restructure their commercial loans as a result of the devastating impact of today's turbulent economy. Depending on the situation, lenders are acting to avoid a commercial mortgage default and finding creative ways to temporarily or permanently modify commercial loan terms.
Kit Kat Land: Land Split Strategies
In today’s depressed real estate market, many buyers see opportunities in smaller projects. Some are even finding that the best opportunities may be in property that has not been legally separated from a larger parcel of land. When pursuing such properties, it is always best to devise a clear strategy to ensure that the buyer is adequately protected if the property division is denied or delayed.
Collecting on Commercial Leases
Landlords have a variety of options in collecting rent from commercial tenants. Landlords should seek to enforce personal guarantees. Landlords may also seek to reenter the premises and take back possession if rent is at least 5 days delinquent. The landlord may be able to seize any personal property of the tenant to satisfy the rent obligations.
Lawsuits Related to Quiet Title Claims, Adverse Possession and Easements
Property owners can encounter a variety of real estate disputes involving title to the property. These may include adverse possession claims, prescriptive easements and other actions to quiet title. Depending on the type of claim, the owner may have coverage under an applicable title insurance policy.
Homeowner Associations and Recorded Documents
In Arizona, HOA's often record documents that affect title to real estate. Recent decisions by Arizona courts have shed new light on the limits of that power. In fact, there are stiff penalties for false or groundless documents that are recorded.
Arizona Real Estate Disclosure Disputes
In Arizona, the seller of real estate has a duty to disclose certain items to the buyer. Failure to do so can result in liability for the seller and sometimes the real estate agents involved in the transaction. This article explores specific disclosure issues that often arise.
Overview of the ROC Complaint Process
The Arizona Registrar of Contractors has a detailed process for filing a complaint against a contractor licensed by the state. The procedures allow for an investigation, hearing and appeal if necessary. A homeowner damaged by a contractor may even be able to access the ROC's recovery fund.
Homeowner Legal Options Against HOA Abuse of Power
In Arizona, HOA's generally have a great deal of power over the homeowners in the community. However, there are legal protections in place to check that power. Homeowners have the option to remove board members and amend the rules themselves in many communities. This article explores those options.
Collecting on Construction Projects: An Overview of Collection Options
Contractors and suppliers for a construction project have several options available to collect for their work and supplies. Many of these options require that very specific laws be followed in order to preserve the contractor's claims. This article explores those options.
Answers to Common HOA Assessment Lien Questions
In Arizona, HOA's have the right to record a lien on your home to secure any unpaid assessments. However, the HOA must follow very specific laws or the lien could be invalid. This article explores some of the common issues homeowners face with HOA liens.
HOA Architectural Disputes
Many HOA disputes involve architectural issues. In most communities, a homeowner must get approval for any modifications to the exterior of their home. However, there are protections for homeowners and rules that the HOA must comply with as well.
When is a Lis Pendens Appropriate?
I often get questions from clients about whether a lis pendens can or should be utilized in their case. A lis pendens is a Latin term meaning "a pending lawsuit" and can be a powerful tool in preserving real estate during a lawsuit. There must first be a lawsuit filed involving real estate in some way.
Property Owner’s Guide to Understanding and Removing Mechanic’s Liens
Mechanic's liens are becoming more prevalent in a difficult economy. However, there are very specific legal obstacles a contractor must follow to perfect a mechanic's lien. Often, the contractor misses a step, which can result in an invalid lien. But the property owner has options for removing the lien.
Real Estate Lawsuits and Disputes
In Arizona, the real estate profession is regulated primarily by the Arizona Revised Statues and the Arizona Administrative Code. These laws provide the licensing requirements for brokers and salespersons and regulate various aspects of real estate. Disclosure issues are usually at the heart of these disputes.
Your Rights in an HOA
Recent changes in Arizona law provide more protections for homeowners living in a homeowner association. This article outlines some of your rights when living in an HOA. Topics include assessments, fines, board meetings, among others.