Resources

Angel Law Offices is pleased to provide our clients and friends with articles, reports and other information useful to real estate professionals. Thank you for visiting our real estate law website.

PAGE 1 OF 2

5 Bottom-Line Issues to Consider when Negotiating a Lease Guaranty

Landlords often require a personal or corporate lease guaranty. A commercial real estate lease guaranty, a separate document executed simultaneously with the lease, makes the guarantor liable for the tenant’s defaults under the lease. The conflicting interests between landlord and guarantor are obvious: landlords want an unconditional and unlimited guaranty, while guarantors want a conditional and limited guaranty. Below are five bottom-line issues to consider and a checklist to review when negotiating a commercial real estate lease guaranty.

Set a maximum dollar cap on guarantor’s liability. The parties can set a maximum dollar cap on the guarantor’s liability. For example, the landlord can agree to cap the guarantor’s liability at $100,000, $500,000, or any other amount. The dollar amount of the cap generally bears some relationship to...[read more]

Angel Law Offices - Commercial Real Estate Lawyers - Los Angeles | Denver | Boulder
Read More
7 Practical Steps to Expedite the Sale of Commercial Real Estate

Owners selling commercial real estate should consider these seven practical steps to expedite the due diligence period, decrease the negotiated reductions in sales prices, and speed up the eventual closing.

Property Information. Collect and organize all available property information to provide to potential buyers as early as possible. Gather and organize property information prior to placing the property on the market. Your ability to promptly deliver well organized due diligence materials will shorten the buyer’s due diligence period. Information to collect includes: financial information (rent rolls, operating statements, tax bills and other expense information), leases, environmental reports, soil reports, physical inspection reports, termite reports, surveys, plans, permits and warranties.

Title and Survey. Obtain a survey and title commitment to shorten buyer’s due diligence period. Obtaining and delivering a current title report, together with a copy of the underlying documents, from a financially sound title company may enable...[read more]

Angel Law Offices - Commercial Real Estate Lawyers - Los Angeles | Denver | Boulder
Read More
Due Diligence for Commercial Real Estate: A Checklist for Seller’s Documents

The information a buyer gathers and evaluates during the due diligence period will vary depending upon many factors, including the size of the transaction and due diligence budget, property type (office, retail, industrial, multi-family, land, etc.), occupancy (vacant, single tenant or multi-tenant), prior uses of the property, etc. Depending upon the property involved, there are items in this due diligence checklist that may not be appropriate and other items not listed that a buyer may want to include.

Buyers of commercial real estate often ask sellers to insert in the purchase agreement a list of due diligence documents to be delivered by the seller. If information in the buyer’s document list is not readily available to the seller, the document list may be narrowed down by the seller during negotiations. This process, in itself, may provide the buyer with insight into unquantifiable risks or costs that will be incurred to obtain the necessary information.

There are many elements of the due diligence process for commercial real estate, including obtaining new third-party inspection reports and a title report. This due diligence checklist focuses on information that buyers attempt to obtain from sellers. Whatever information is ultimately provided, sellers generally include a provision in the purchase agreement stating that the information contained in documents and third-party reports must be verified by the buyer and shall not constitute a representation or warranty of the seller as to their accuracy. [CLICK TO VIEW CHECKLIST]

Angel Law Offices - Commercial Real Estate Lawyers - Los Angeles | Denver | Boulder
Click to View Checklist
Request for Prposals in Commercial Real Estate Leases: Why tenants use them - how landlords respond

Commercial lease transactions are generally initiated by a letter of intent, which "outlines" the key business issues for the lease. Though a great starting point, letters of intent leave many business and legal issues open to be resolved during the negotiation of the lease. Since most lease forms are prepared by landlords, they routinely resolve issues not addressed in the letter of intent in favor of the landlord. Notwithstanding this "edge" landlords have in the letter of intent process, letters of intent work well and are used for most transactions.

Some tenants, when leasing a significant amount of space in the marketplace, attempt to "level the playing field" by using a request for proposal (RFP). A RFP contains a.... [read more]

Angel Law Offices - Commercial Real Estate Lawyers - Los Angeles | Denver | Boulder
Read More
8 Steps to Keep Your Letter of Intent Non-Binding

You own commercial real estate and sign a letter of intent that contains the material deal points for your transaction. At the end of the letter, it clearly states: “Unless a formal agreement is entered into within 30 days of the date of this letter, this letter of intent shall be non-binding and of no further force or effect.” Sounds clear enough. But be careful, you can be bound by a letter of intent, even if it states it is non-binding. The two main issues used by courts to determine whether a letter of intent is binding or not are the parties’:

      •   Intent, as expressed in the letter of intent, and

       • Actions, taken after the letter of intent is signed.

Below are eight simple steps you can take, and a sample non-binding clause you can use, to help ensure that your letter of intent will remain non-binding:

     1. Language should not imply the existence of a binding agreement. Avoid using language that can be interpreted as creating a binding agreement. Language included in a letter of intent such as “agree,” “offer,” “acceptance,” or “offer will be null and void if not accepted by xx/xx/xx" may be interpreted as...[read more]

Angel Law Offices - Commercial Real Estate Lawyers - Los Angeles | Denver | Boulder
Read More