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ASK FOR A BETTER LEASE FOR YOUR GYM

On behalf of Michael Brooks of Law Offices of Michael A. Brooks posted in commercial real estate on Friday, February 23, 2018.

How much room you have to negotiate your gym lease depends a lot on who has leverage — and how much of it — in the situation.

You’ll obviously have more room to negotiate for what you want if you have great credit or there are a lot of open commercial properties available. However, you won’t get anything if you are too afraid to negotiate. In order to get the best available lease for your gym, below are three important and highly negotiable matters to address.

1. Competitors

Your gym can help liven up an otherwise dull retail strip mall. However, there is such a thing as “too much of a good thing.” Negotiate for the right of review and refusal toward competitors in the fitness industry. That’s the only way to keep your landlord — whose primary concern is keeping the available spaces filled and appearances thriving — from renting to a competitor that could steal your clients away.

2. Common area charges

It’s easy to forget about the issues that come up with common tenant areas when you’re focused on a great usable space. However, issues with common areas affect your bottom line. Maintenance charges, in particular, can be costly. Make sure that you negotiate exactly what services your landlord will provide in terms of cleaning, insurance, maintenance and repairs. Take the opportunity to ask for more in terms of what your landlord will provide or less in terms of what you’ll pay toward those services.

3. Insurance demands

You’ll doubtless have to provide your landlord with proof of your insurance — but how much insurance you have to have depends a lot on the terms of the lease. You can ask for a reduced minimum coverage insurance amount. That can significantly help reduce your operating costs.

4. Noise issues

While it may seem counter-intuitive to draw your potential landlord’s attention to a possible issue, the reality is that gyms are usually noisy. People shout instructions, offer loud encouragement to each other, play music for inspiration and clank weights together. The goal in bringing up the issue is to get your landlord’s assurances now about how noise complaints from other tenants will be handled.

There’s a lot to address in any commercial real estate lease — but good negotiations now can make for a great business relationship later.

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HOW COMMERCIAL REAL ESTATE ATTORNEYS HELP NEW BUSINESS OWNERS

On behalf of Michael Brooks of Law Offices of Michael A. Brooks posted in commercial real estate on Saturday, February 17, 2018.

Commercial rental agreements are nothing like residential rental agreements — they’re vastly more complicated and something that many new business owners are unprepared to navigate on their own.

In addition, commercial leases aren’t granted the protections guaranteed under the law to those taking out a residential lease — business professionals are generally expected to fend for themselves. If you get stuck in a bad deal, you’re generally stuck with that bad deal — even if it’s grossly unfair.

That’s where a commercial real estate attorney can often help. The attorney’s job is to be familiar with the laws and the potential drawbacks of any terms in the lease — and to advise you when to negotiate and when to run. Among other things, a real estate attorney can help you:

  • Understand what type of commercial lease you are taking (since there are several options) and how that can affect your business
  • Determine whether rental escalation clauses are tied to a reasonable figure or are likely to leave your business struggling
  • Make sure that you have a reasonable right to sublease, if necessary
  • Make sure that any failure of the building to meet the accessibility requirements of the American’s With Disabilities Act doesn’t become your problem
  • Determine what right you have to terminate the lease
  • Make certain that you know who is responsible for the maintenance of the grounds and any common areas shared between tenants
  • Determine what would happen to your lease if the landlord sold the property
  • Advise you about the wisdom of accepting a lease that holds you to mediation or binding arbitration instead of allowing you to take a claim to court

In addition, because the laws surrounding commercial leases are often tied to the location of the lease, they can vary highly — even inside the same city. Part of an attorney’s job is to make certain that the lease is compliant with the law.

While not everyone needs help understanding the complex world of commercial leases, many new business owners can benefit from an attorney’s guidance. It helps to have a clear vision of the potential for future problems — that way, they can’t take you by surprise.

Source: Inc., “Understanding Commercial Leases,” accessed Feb. 16, 2018

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SHOULD I CHOOSE A NEIGHBORHOOD WITH A HOMEOWNERS ASSOCIATION?

On behalf of Michael Brooks of Law Offices of Michael A. Brooks posted in blog on Thursday, February 15, 2018.

California is home to some of the most beautiful neighborhoods in the world. Many of these neighborhoods, particularly in newer suburbs or planned unit developments, are maintained by a homeowners association (HOA). If you are house-hunting, you may be wondering whether you should purchase a home in a neighborhood that has an HOA.

Defining HOAs

A homeowners association is a group that manages a neighborhood’s common spaces and enforces certain rules for community residents. HOAs are composed of several volunteers as well as a board of elected residents. Anyone who resides in the neighborhood presided over by the HOA is able to participate in it. Living in a neighborhood that has a homeowners association generally requires monthly fees to cover maintenance and other expenses. Every homeowners association is slightly different regarding its rules and how stringently it enforces them. Some HOAs are very strict, while others tend to be relaxed.

The pros and cons

For many people, HOAs are a love-it-or-hate-it topic. Some residents love having a neighbor-run association that can regulate other residents’ behavior, home appearance and responsibilities. Others balk at the thought of a regulatory body that can restrict their decisions as a homeowner. These are some of the pros and cons of living in an HOA:

Pros

  • Less maintenance required of residents
  • Attractive-looking homes and lawns
  • Many nearby amenities
  • Association management can handle disputes

Cons

  • Monthly fees required
  • Less personal choice for homeowners
  • Rules and regulations may feel too restrictive
  • Subject to fines for violating rules

Dealing with HOAs

Every once in a while, a resident may run into an issue with their homeowners association. Disputes can arise because of maintenance issues, HOA contract disputes, liability issues and boundary disputes, to name just a few examples. These issues are usually resolved through private discussion, but they can sometimes become contentious and complicated enough to necessitate legal counsel.

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WHAT’S THE DIFFERENCE BETWEEN MINERAL RIGHTS AND SURFACE RIGHTS?

On behalf of Michael Brooks of Law Offices of Michael A. Brooks posted in commercial real estate acquisitions & dispositions on Wednesday, February 7, 2018.

Most people assume that when they buy a piece a land they’re buying ownership in “fee simple,” meaning that the deed includes everything on it and under it as well. However, that may not be the case if the property happens to be located in an area where there are often significant underground resources.

Surface property rights include the right to build on the land and farm it. Mineral rights, on the other hand, include the right to mine the property for oil, gas and precious minerals like gold and silver. These two rights can be severed and sold (or willed and inherited) independent of each other.

This can create a lot of confusion about who has the right to do what on the property. If you own the surface rights but not the mineral rights, you may not be able to stop someone from reasonable access to mine the land. On the other hand, if you own the mineral rights, a mining company may not be able to simply start digging for gas or oil. The owner of the surface rights has to be considered.

Unfortunately, it isn’t always easy to tell whether or not a property seller is offering fee simple rights or not. It isn’t among the required disclosures in many states to tell a prospective buyer if a property’s mineral rights have a different owner.

That’s why it’s always advisable to have a title search done very carefully before you purchase. If you do find out that the mineral rights are severed on a piece of commercial real estate that you plan to purchase, you have a variety of legal options to explore rather than just walking away.

For example, it’s possible to negotiate a lease agreement with the holder of the mineral rights that will restrict access to the minerals and prevent a mining company from coming in and disturbing things. Alternately, you could try to purchase a share in the mineral rights yourself (if the owner won’t sell them all). That would prevent a company from mining them without your agreement.

Source: Mineral Wise, “Surface Rights vs Mineral Rights in Oil & Gas Leasing,” accessed Feb. 07, 2018

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CAN I SET UP A POT DISPENSARY IN BEVERLY HILLS?

On behalf of Michael Brooks of Law Offices of Michael A. Brooks posted in land use & zoning restrictions on Friday, February 2, 2018.

While setting up a medical marijuana dispensary in many parts of California may be legal to do, that’s not the case in the city of Beverly Hills. The City Council made it illegal to do so at a meeting on August 8, 2017.

Resolution No. 1813 is the latest legislation that has been drafted on the matter. It further clarifies previously drafted ordinances regarding the legality of setting up commercial cannabis operations in the city.

While the existence of any type of commercial cannabis operation is prohibited in the city, outside companies can still come into the area from neighboring cities to distribute medical marijuana to patients. The latest ordinance reflects that Beverly Hills has deviated from state law regarding the harvesting of the drug for personal use.

In the minutes taken from the closed-door hearings on the matter, the city council refers to concerns over the public’s welfare, health, and safety as reasons for not allowing pot dispensaries to be set up in the city. The minutes also show where the city’s lawmakers have attempted to more clearly define the term “commercial cannabis activity” from their perspective. They described it as being any marijuana created through cultivation, and also as marijuana used for medical or non-medical treatment, and also the transportation of marijuana. They also established that activities such as labeling, selling, delivering and using marijuana or its derivatives for laboratory testing purposes are also illegal.

If you’re unclear as to whether the operation you’re considering setting up would violate existing city ordinances, then a Beverly Hills land use and zoning restrictions attorney can provide guidance in your case.

Source: City of Beverly Hills, “Marijuana regulations and information,” accessed Feb. 02, 2018

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