Category: Real Estate

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 […]

Montgomery County Real Estate Lawyer Highlights Federal, State and Local Laws That Might Apply to Your Next Real Estate Transaction

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Real Estate on Jan 27, 2017.

Depending on your point of view, the myriad of federal, state and local laws impacting a single real estate transaction is either an unnecessary hindrance adding to the cost of the transaction on all sides, or needed protections for all parties, the environment and society in general. From consumer protection to environmental protection to zoning, all branches of government want to have a say in your deal. Our Montgomery County real estate lawyer highlights some of the laws below. Federal Laws Relating to Real Estate By far the most encompassing of the three levels of government, federal statutes and their implementing regulations touch on all aspects of a real estate transaction and beyond: The sales process (e.g. what you can say and who you can sell to); Inspections (e.g. the duty to disclose); Appraisals (e.g. qualifications and non-hindrance); The lending process (e.g. who can be required to sign; disclosure of terms); The closing process (e.g. fees, title companies, closing costs, escrow); and The foreclosure process in the event of default under a mortgage (e.g. disclosure of rights and cure periods). The following are some of the federal laws that may directly or indirectly relate to your real estate transaction: Fair Housing Act; Truth In Lending Act, Consumer Protection Ac; Real Estate Settlement And Procedures Act; Equal Credit Opportunity Act: Home Mortgage Disclosure Act; Fair Credit Reporting Act; Americans With Disabilities Act; USA Patriot Act; Dodd Frank Wall Street Reform and Consumer Protection Act; Financial Institutions Reform, Recovery, and Enforcement Act; […]

A Tenant’s Right to Assign or Sublet a Commercial Lease

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Real Estate on Oct 21, 2016.

Over the past several years as businesses struggle to ride out the tough economic times, they have had no choice but to downsize. Tied to commercial leases for more office or retail space than they need, an assignment of the lease or the subletting of the extra space seems like an attractive way of saving on expenses. In making the decision whether to assign or sublet, the tenant should first carefully examine its lease to determine whether the lease contains any provisions prohibiting or restricting assignment or subleasing. Commercial leases, like any other contracts, are governed by their terms. Therefore, whether a tenant has the right to assign a lease to another party or to sublet the leased premises to another tenant depends on the language of the tenant’s lease with the landlord. If the lease does not contain language prohibiting or restricting the assignment or transfer of a tenant’s interest, a tenant is free to assign or transfer all or part of its interest. A tenant is not required to obtain prior consent of the landlord, unless the lease contains language requiring the tenant to obtain prior consent of the landlord. In making the decision whether to assign or sublet, the tenant should also understand the legal differences between the two concepts. An assignment of a lease is the transfer by the tenant of all of the tenant’s rights and interest in the lease. In an assignment, although the assignee tenant effectively steps into the shoes of the assigning […]