Negotiating seller’s representations and warranties in a commercial real estate purchase and sale contract can be contentious since buyer and seller have very polarized positions. At one end of the spectrum, seller believes that, independent of any seller representations, buyer is capable of learning as much about the property as buyer needs to know. So,

In the purchase and sale of a property encumbered by an existing loan, parties may structure the transaction for buyer either to specifically assume the existing loan or take title to the property “subject to” this loan. Whether buyer takes “subject to” or “assumes” an existing loan has significant and different consequences for the lender,

To verify a property’s cash flow, buyer customarily reviews the leases since any inaccuracies can greatly affect the property’s net operating income and thereby its value. But, buyer cannot by only reviewing the leases determine how much tenants actually currently pay for base rent, property taxes, insurance and other common areas costs, and if such

Increasingly, real estate agents are forming teams to work cooperatively on deals and agreeing to split commissions generated from the team’s deals. After a team breaks up, and sometimes even while agents are working as a team, disputes arise regarding an arrangement to share commissions. If the dispute is resolved neither by the supervising broker

Cotenancy Breach Remedies A California court of appeal has held that a shopping center lease provision allowing the tenant to completely abate monthly rent starting when a cotenancy requirement was not satisfied was an unenforceable penalty since the tenant admitted it did not suffer any damages from the violation of the cotenancy requirement. But the

Finder – a precarious status By: Bryan Mashian Often, parties call a person involved in a real estate deal – who is not licensed as a real estate agent – a “finder” in order to compensate this person. But, to qualify as a “finder”, such person’s entire activities in the transaction must be limited to

Commercial Brokers Must Disclose Agency By: Bryan Mashian New law requires California commercial real estate brokers, like their residential counterparts, to disclose which party they represent in a transaction. The source of payment of the broker’s commission does not necessarily determine the principal that the broker represents. Brokers often agree to share the commission between

Risks of circumventing the safety clause By: Bryan Mashian Even though real estate brokerage listing agreements typically include a “safety” clause which obligates the owner to pay the broker a commission if the property is sold or leased within a specified period after the listing period expires, the parties may nevertheless be tempted to go

Making enduring sublease deals By: Bryan Mashian Subleases may present the opportunity for a subtenant to save money by renting space at below market rates or for a sublandlord to make a profit by renting space at above the master lease rent. But such a seemingly good deal may not come to fruition or last

  In the “old” days, if there wasn’t a written agreement signed with wet, ink signatures, there was no binding deal. Now with email, it’s much more complicated. Real estate transactions are routinely negotiated using email instead of personal meetings or telephone conversations. Who even remembers faxes! But negotiating through emails poses more risks for a