Benefits of Having a Corporation In the real estate industry, there are many complexities of legal and financial matters involved in property transactions. Establishing a corporate structure provides real estate agents numerous advantages, ranging from tax benefits to liability protection. By operating through a corporation, agents can potentially reduce tax burden and shield personal assets from business-related liabilities, providing invaluable peace of mind in an inherently risk-laden industry. Without setting up a corporation, real estate agents operate as sole proprietors or in partnerships, exposing themselves to significant risks. They may face personal liability for business debts, lawsuits, or legal claims... READ MORE

When you are moving your business into a new space whether an office, industrial or retail location, there are a number of decisions and protections you’ll want to consider before signing a lease agreement with a landlord. The lease agreement comes in many forms and every situation is unique, which is why it’s important for you as the tenant to review the document with a qualified business or real estate attorney. Keep in mind that lease terms are always negotiable. You can assume that the document presented to you by the landlord favors the landlord and of course in many... READ MORE

Whether you’re opening a new business in its first location, moving, or expanding, you’ve probably put a lot of thought into the location, building, and unit you’ve chosen. Before you receive a business lease to review, you’ve probably toured many options and spent a lot of time negotiating with the property owner. While you may be tempted to think you’ve already negotiated all the important details and that you can proceed with executing the document, it’s important to take time to carefully review the lease with an experienced real estate attorney, who can help negotiate the lease terms which can... READ MORE

As the popularity of house-flipping shows on TV demonstrates, investing in real estate can be an attractive wealth-building option with a high potential for success.  However, there is also a high risk associated with any real estate venture, both in playing the market correctly and in understanding the financial and legal issues involved in running a real estate investment business. Before taking the plunge and buying a property to flip or rent, it’s important to take a few steps to protect both yourself and your investment. Forming a Real Estate Investment Business While you certainly don’t need to set up... READ MORE

Many California state laws are revised or amended each year. It's never too late to review some of the changes going forward as we approach the end of the year. 2016 saw a multitude of federal and state laws that affect the sale of real estate, as well as the agents and brokers thereof. Senate Bill 647, codified as California Business and Professions Code §§ 10232.3, 10232.45 and 10238 respectively, became effective January 1, 2016. This law makes various changes to the rules governing threshold brokers including: adding a category of properties they are permitted to solicit; changing the timing... READ MORE

Commercial leases seldom follow a standard form and do not provide the same kind of protections as residential leases. While commercial leases are generally drafted in favor of the landlord, tenants may have the flexibility to negotiate more advantageous terms. Below is a summary of items that are often amenable to modification. These clauses should be reviewed carefully to ensure that the terms are understood and acceptable to the lessee. Duration of Lease. As a commercial tenant, the flexibility to terminate or extend a lease, or to renegotiate the lease term is critical. The term of a commercial lease can... READ MORE

California recently enacted the Uniform Voidable Transactions Act (UVTA), which introduces discrete modifications to the previous law governing fraudulent transfers, the Uniform Fraudulent Transfer Act (UFTA). The UFTA provided that a “fraudulent transfer” occurred when a debtor transferred property to a third party with the objective of obstructing or defrauding a creditor, or did not receive equivalent value for that property if the debtor was insolvent. The UFTA furnished a legal means for voiding a fraudulent transfer and returning the property to the debtor or debtor’s estate. The current UVTA revisions accomplish the same goals and are designed to conform... READ MORE

Under the Nonresidential Building Energy Use Disclosure Program, also known as AB 1103 (AB 1103), any individual who finances, sells or leases a non-residential building in California of a designated size is required to disclose the building’s ENERGY STAR ratings to the opposing party and to report this information to the California Energy Commission (CEC). The purpose of the legislation is to promote greater efficiency in commercial buildings through enhanced disclosure requirements. The reporting of energy use in the affected structures takes into account the consumption of all types of energy, including electricity, natural gas and fuel oil. This program,... READ MORE

If you operate a business and are looking to lease space for your operations, you need to know that the rules that apply to residential tenants are different from those that apply to commercial tenants. Most states, including California, have extensive legal protections for residential tenants in furtherance of the overall public policy of providing safe and secure housing to residential renters. Both federal and state laws are designed to protect the rights of residential tenants, who are deemed to be in an inferior bargaining position vis-à-vis their landlords. In contrast, commercial tenants are regarded as having the same skill... READ MORE

In a recent article Real Estate Takes Its Place as the Fourth Asset Class author David Funk, reflects on the historical shift in institutional investors from viewing real estate as an “alternative investment” to the current trend of many fund managers to permanently shift up to 10% in a portfolio position from stocks, bonds and cash to real estate. “What,” you say?  Less than 10% allocation in real estate investments for large institutional investors?  For family funds or individual investors active in the real estate market 10% seems dismally small.  Those who own significant real estate portfolios prefer real estate... READ MORE