Monthly Archives: February 2017

Common Disputes in Residential and Commercial Construction

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Real Estate on Feb 23, 2017.

As soon as initial plans have been drawn up — and well before construction begins — it’s important for all involved parties to pay close attention to potential “cracks” and “fault lines” in the ongoing negotiations that could lead to a significant dispute later on.  Of course, not all disputes can be predicted.  There is an basic level of uncertainty that accompanies all residential and commercial construction projects. Whatever your position relative to the construction project (contractor, developer, purchaser, etc.), it’s absolutely critical that you work with a skilled Delaware County real estate lawyer who will provide expert guidance and draft specific agreements to limit the potential of a lawsuit, even in the event that a dispute arises. Well in advance of construction, try to be mindful of disputes that commonly arise in both residential and commercial construction projects.  By understanding the potential for dispute, you may be able to clarify issues beforehand and avoid costly litigation down the road. The following is a non-exhaustive list of common disputes that arise in both residential and commercial construction projects. Excessive Delay If your construction contract includes explicit deadlines for the completion of various project milestones (and makes clear that such deadlines are materially relevant to the satisfactory completion of the contract), then a significant delay that threatens the contractual bargain is very likely to lead to a legal dispute.  Even without an explicit deadline, if a delay is particularly excessive, it may be linked to abandonment of the construction project altogether. […]

Financing Your Next Commercial Real Estate Venture

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Real Estate on Feb 21, 2017.

Commercial real estate financing can be particularly complicated and high-stakes when compared to other forms of borrowing — in part because the loan amounts are likely to be quite significant, and in part because commercial financing loans are secured by the potentially income-earning real estate itself (or related assets).  As such, developers and other borrowers are best served by keeping apprised of the potential issues and exercising caution as they approach the commercial real estate financing process. If you’re preparing to finance your next commercial real estate venture, then you’ll want to make sure that you engage lenders with the following issues in mind. How an Assignment of Leases Works In the commercial real estate financing context, an assignment of leases grants the lender landlord rights normally granted to the borrower, in a limited capacity.  When the borrower defaults or owes some other obligation to the lender, then the lender is empowered to act as the landlord and collect rent to cover the debt (the lender gains a security interest in the rent from leases relating to the property at-issue). How does it work? Generally, an assignment of leases completely transfers the borrower’s rights under the leases over to the lender, who then grants the borrower a license to act as the landlord (this license can last for an indefinite or definite period of time).  If the borrower defaults, however, then the lender is entitled to take back the license and operate as the landlord instead. As a general rule, […]

Five Things That Could Impact Real Estate Developers in Philadelphia County

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Real Estate on Feb 16, 2017.

If you are a real estate developer or other interested party in Philadelphia County, there are a number of unique programs and zoning regulations that are likely to have an impact on your current/future projects in the county — some positive (i.e., grants, reimbursements, etc.), others negative (i.e., forced community outreach, increased administrative overhead, etc.). The following is a non-exhaustive list of high-impact regulations in Philadelphia County affecting real estate developers.  As a developer, it’s critical that you remain apprised of new regulation and how it will influence your projects from an administrative, financial, and foundational feasibility perspective. Developer Services Program for Large Real Estate Projects The Developer Services Program is a voluntary program available to developers of large-scale real estate projects (e.g. projects involving more than 25 residential units or 50k square feet of floor space).  The Program gives developers the ability to submit early plans to various Planning Commission staff and approval agencies — after a Committee Meeting and preliminary review is conducted, the stakeholders coordinate the project details in order to meet the requirements for approval. Fundamentally, the Developer Services Program offers developers a means with which to smooth out and quicken the approval process. Neighborhood Economic Development Grant Program May Open Up New Opportunities Pursuant to the establishment of the Neighborhood Development Grant Program, the Philadelphia Department of Commerce has made a serious attempt to help encourage development of long-neglected neighborhood commercial areas. The Neighborhood Development Grant Program enables neighborhood-based organizations to request and be awarded […]

A Brief History of Land Use Regulation

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Land Use on Feb 14, 2017.

Land use regulation encompasses a wide variety of laws that impose restrictions on the rights of landowners.  These regulations may include rules relating to building size and zoning rules, among various other permutations.  Fundamentally, all land use regulation is intended to burden a landowner’s use of their real estate property in some way. As late as the turn of the 20th century, most cities in the United States lacked zoning laws altogether — in fact, it was not until 1916 the first zoning code was developed and implemented in New York City.  As the country rapidly urbanized over the course of the 20th century, however, land use and zoning regulations became ubiquitous. Pennsylvania Land Use A significant portion of Pennsylvania land use regulation is split between four land use planning tools authorized by the Pennsylvania Municipalities Planning Code (effected into law in 1968), which empowers municipal governments across the state to implement their own land use regulations. Penn State’s College of Agricultural Services notes that the four municipal land use planning tools in Pennsylvania are as follows: Planning Commissions Planning commissions consist of elected advisors who provide administrative policy guidance on land use regulation and implementation in their respective community.  Advisors wield considerable power in being able to develop and prepare design plans for land use organization and development. Comprehensive Plan The comprehensive plan document is perhaps best seen as a policy guide that represents the coordinated views of a variety of stakeholders — the planning commission, politicians, agencies, private […]