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TIPS FOR NEGOTIATING A CELL TOWER LEASE

On behalf of Michael Brooks of Law Offices of Michael A. Brooks posted in commercial real estate on Friday, March 30, 2018.

Cellular companies are always looking for new places to build the towers they need to transmit customer data. If you’ve been approached by one about leasing a spot on your land, you need to make sure that you are getting a fair deal.

While any bit of cash for land you aren’t currently using is probably appealing, you don’t want to practically give it away. Here are a few tips that can help you negotiate:

1. Remember that the company representative, no matter how nice he or she may seem, is being paid to get the company the best possible deal. In fact, there’s probably a bonus for the agent if the cost of the lease is low enough. He or she is not going to volunteer any information that would increase your bargaining power. That’s one of the reasons that people often look for advice from a commercial real estate attorney who is familiar with cellular tower leases.

2. The actual value of the lease increases according to how many different carriers want to use the tower. That means that if you have a prime spot that could benefit a number of cellular companies, a tower on your property has actual investment value. That should be considered when setting the cost of the lease.

3. You don’t want to agree to a rent-per-square-foot deal. The actual size of the cellphone tower can be pretty small. Agreeing to a lease based on square footage of land used is a sure way to undercut your own profits. The value of the tower is the same regardless of its actual land usage.

4. Negotiate a regular increase in the lease rate for inflation. You can generally come to an agreement about how often the rent will adjust for inflation and what marker will be used to set the adjustment. A cell tower is likely to stay put for years. The rent you charge today won’t look so handsome in a decade once inflation kicks in.

Keep in mind that information is power when you’re negotiating. Good research and the appropriate consultations will keep you from finding out in a few years that you were shortchanged.

Source: Technogog, “4 Facts to Know About Cell Tower Leases,” Kristofer Brozio, accessed March 30, 2018

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CALIFORNIA EYES MAJOR ZONING LAW CHANGES

On behalf of Michael Brooks of Law Offices of Michael A. Brooks posted in land use & zoning restrictions on Friday, March 23, 2018.

Some areas of California are running out of space for housing developments, and industry leaders and politicians are thinking that it’s time for some drastic changes.

However, those changes may spell the end of local controls over zoning regulations in the name of the greater good.

If you’re thinking about investing in California real estate, this is important news.

Zoning restrictions have become a major factor in a number of issues in the state over the years. The housing shortage has made it difficult for the average person to find affordable rents. In addition, employers resent the zoning restrictions around mass transit locations because it forces potential employees to commute long distances — or go somewhere else to live and work.

If the state has its way, those problems could become a thing of the past. If the proposed State Bill 827 passes, local jurisdictions would be barred from enacting zoning restrictions that would stop housing developments from going up near light-rail train stations or bus routes that are regularly used. Experts say that would essentially affect around 95 percent of some cities.

In addition, the new zoning regulations included in Sill 827 would require housing developments to be a minimum of 45-85 feet in those same areas. That would make eight-story buildings a given.

Environmentalists and current residents of those areas may not be enthusiastic about the changes but executives from a wide array of industries — including tech companies, rideshare companies and more — are backing the bill. They say that the current zoning restrictions are, in essence, killing the growth of their companies by making it too hard to find and employ good workers.

Those opposed to the bill consider it absolutely draconian in nature. It guts the ability of local jurisdictions to let the people already living there decide what is actually in their best interests by vote.

While it remains to be seen if the bill will pass, the odds are good that it will (given the amount of high-profile backers it already has among the captains of industry). If it does, the opportunities for investors who are ready to begin those housing developments are ripe for picking.

Source: The Porterville Recorder, “Commentary: Zoning nullification: The end of local control,” March 08, 2018

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COMMERCIAL LEASES CALL FOR ATTORNEY ADVOCACY

On behalf of Michael Brooks of Law Offices of Michael A. Brooks posted in blog on Saturday, March 17, 2018.

Embarking on the search for the perfect commercial property to lease is more than about finding the right location for your business. Here are some important points that an attorney can make you aware of that can make an impact on your lease agreement.

Go Beyond the Starting Line

The first lease agreement that the landlord presents to you is just the start of the negotiations. Make sure that you have a lawyer representing you that is comfortable and experienced with lease negotiations. Working out a deal that you and the landlord can live with does not need to be a protracted process when you have expert advice on your side.

Review with due diligence

Since a lease is a legal contract, it makes perfect sense to hire an attorney to do a thorough review of the lease agreement both during negotiations and after the final document is finished. Your lawyer will plow through the whole agreement with an expert’s eyes, which will reveal any subtleties in the clauses and enable you to know exactly how much you will pay for your space.

Curb in Financial Liability

Legal consult can review the proposed agreement thoroughly to ensure that there are no surprises hidden in clauses that can get you in over your head financially. An example would be a provision that you as a tenant would have to pay for a landlord’s improvements on the property.

Know When to Bail

Your attorney can negotiate a bail-out clause for your lease. This clause protects you if your sales do not make it up to a pre-determined level. Your liability exposure to the full lease amount is limited.

There are multitudes of details in a commercial lease agreement that matter for your bottom line. Protect your interests and ensure that you get the best deal possible with a lease review and representation during the lease negotiation process.

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FREQUENTLY ASKED QUESTIONS: LEGAL MARIJUANA AND RENTERS

On behalf of Michael Brooks of Law Offices of Michael A. Brooks posted in commercial real estate on Thursday, March 15, 2018.

With the growing legal acceptance of marijuana on a state-by-state basis, there’s a lot of confusion about how the owners of multi-unit rentals need to address the issue.

Here are some of the most commonly asked questions about rental properties and marijuana in states like California:

1. Can you bar tenants from smoking marijuana in your rental units?

Yes. In fact, if your lease already bans smoking, you don’t need to add anything.

2. If a lease bans illegal drug use, is marijuana covered?

No. In order to avoid a legal issue, you need to amend the lease to state that drugs that are illegal under federal law are prohibited. Marijuana is still considered illegal under federal law.

3. What should you do about medical marijuana?

This is a complicated question that doesn’t have an easy answer. If you ban smoking, you can still allow edibles, oils and other forms of medical marijuana.

On the other hand, if you ban illegal drug use and the manufacturing or cultivation of drugs on the property, medical marijuana can still be an issue. State laws and the laws in your municipality can also conflict. It might be wise to seek the advice of an attorney who handles real estate and landlord-tenant issues.

4. Do you have to allow tenants to cultivate marijuana if you do allow smoking or marijuana use?

No. You can restrict grow operations, even though it is legal for some people in California to have six adult plants or 12 immature ones. They take up a tremendous amount of electricity and water, which can cause your expenses to skyrocket. The humidity required for proper growth can also cause problems with mold. That can damage your units and lower the value of your property. Insurance is unlikely to cover any damage done as a result of growing the plants because growing them is still illegal under federal law.

It’s difficult to keep up on the changing nature of the laws regarding marijuana — but it’s necessary if you want to keep your real estate investments profitable and in good shape.

Source: www.irem.org, “Marijuana in Property Management,” accessed March 15, 2018

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HOW CAN YOU HANDLE A ZONING PROBLEM?

On behalf of Michael Brooks of Law Offices of Michael A. Brooks posted in land use & zoning restrictions on Friday, March 9, 2018.

Finding just the right property for your business needs can be exceptionally frustrating.

You can find the perfect piece of land or building — but if the zoning restrictions are wrong, you can’t make use of it. And those perfect places can be few and far apart.

If you can’t find a new perfect place, it may be possible to negotiate with your local jurisdiction to change things to your liking. You essentially have three options:

1. Ask for the property to be rezoned.

A rezoning request usually applies to just an individual piece of property, although it can involve larger tracts of land as well. Rezoning requires a jurisdiction to redefine the limits on a property’s use. For example, an agricultural tract could be rezoned for industrial use to accommodate a factory outside of the city limits. Or, a small area of undeveloped residential land might be rezoned into commercial use to accommodate a much-needed grocery.

2. You can ask for a conditional use permit.

These permits are issued by the jurisdiction involved. Anyone applying for one must meet whatever conditions are imposed on a business in order to operate on that spot. The permission, once granted, usually continues as long as the conditions of the permit are met.

Cities often allow these when they recognize the usefulness of a business but also see a potential problem. For example, a historic bed-and-breakfast might be useful to bring in tourists, but the guests could create problems for residents in the area if they park all over the streets. The bed-and-breakfast might be required to maintain a parking deck for guests.

3. You can try to get a variance.

Variances aren’t always available. When they are, they often are used in place of conditional permits.

Sometimes a variance is also given to reduce an unusual burden on a property owner who is unable to enjoy the full use of the property because of some irregular feature it involves. However, incoming businesses are usually aware of a property’s limitations before they purchase it, which could prevent them from getting a variance later.

Source: propertymetrics.com, “Rezoning, Variance, or Conditional Use Permit: Which One Can Solve Your Zoning Problem,” accessed March 09, 2018

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BAD REAL ESTATE DEAL LANDS TAYLOR SWIFT IN LAWSUIT

On behalf of Michael Brooks of Law Offices of Michael A. Brooks posted in commercial real estate acquisitions & dispositions on Friday, March 2, 2018.

Even the rich and famous can end up in trouble when a real estate agreement goes south.

A real estate company is suing the firms that represent pop icon Taylor Swift. At issue is whether or not the firms gave a specific agent the exclusive right to sell the singer a piece of New York property she wanted. Famous individuals like Swift often go through intermediary companies to purchase real estate. It’s the only way they can avoid paying artificially inflated property values once the sellers get wind of who wants the property.

He claims that he had a written promise from the singer’s representatives, but the property deal was closed through another agent anyhow. The agent is asking for more than $1 million, which represents the commission he lost when the sale went through another agent.

While neither the singer nor her representatives signed a formal real estate contract with the agent, the representatives did communicate with the agent by email. In at least one of those emails, the agent was told that the companies representing the singer’s real estate holdings would “solely” go through him. While the singer herself didn’t do anything to create the problem, it could end up costing her or the companies she worked with quite an additional expense if the lawsuit is successful.

In this case, it’s very possible that the somewhat casual email exchange between the holding company and the real estate agent may be enough to establish a legally binding contract. It has been sufficient in past court cases that were similar.

Buyers should always be careful about having a written agreement with their real estate agent. While many people don’t like signing a contract that gives someone the exclusive right to sell them a property, those contracts can provide buyers with something very important: an end date to the agreement.

If an agent isn’t working out, the contract can be allowed to expire before the buyer decides to move on to another agent’s services.

Source: realtor.com, “Can Taylor Swift ‘Shake Off’ a Real Estate Lawsuit Gone Horribly Wrong?,” Judy Dutton, Feb. 21, 2018

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