Commercial Property and Arrears: Your Rights as an Owner

When your business runs Into trouble and you’re left without funds to cover your rent, you’re not without options. The !awls designed to make life easier and more secure for you and your lessor.

Tenancies Acts protect the rights of tenants and lessors. In the event of non-payment, the lessor is free to choose an option that best suits both tenant and property owner. The lessor has these primary options — If late payments are a consistent pattern, you may have waived your tenancy rights by defaulting on your lease. This also applies If you’ve failed to remain open for business during the hours outlined by a shopping mall.

The lessor can only issue this waiver after issuing a formal notice warning you of his intent to waive rights. Every lease has different terms for arrears. If rent Is due on the 1st a lessor may consider the rent to be In arrears on that day. If no date of payment Is offered In the contract, the lessor must wait until the 17th of the month to take action.

Lessors are allowed to terminate a lease without a court order, but the process Is complex Your landlord can lean on this right If there is no dispute about the amount owed. Your landlord will choose the option that suits his pocket best, and may exercise one of three main remedies.

Distrain for the amount in arrears (if they want to retain your tenancy. If you have goods on your premises with a value that’s equal to your arrears, the landlord can hold those goods as security. This common law option is subject to some security. This common law option is subject to some !irritations. Only money owed for rent can be claimed.

The landlord Isn’t allowed to sell the goods he has seized. The property owner only has the right to seize goods if rent isn’t due. Entry is obtained legally. You’re still in possession of the property and haven’t declared bankruptcy. The contract hasn’t expired for other reasons You haven’t paid the arrears and the expenses of distraint.

Introduction to Commercial Parking Lots

.. If you’ve ever been to a concert, sporting event or even to a downtown area in the middle of the day, you understand how frustrating parking can be. You have to pay through the nose just to get a chance to park your vehicle in the same zip code as your destination, but for commercial real estate owners, the situation is a goldmine. Parking lots in urban centers or near large venues offer a chance at a passive revenue stream that requires very little work on your part after the initial purchase. Getting started is easier than you might think.

Location Scouting

The most important aspect of a commercial parking property is the location. The closer you are to a destination people want to go to, the more successful your lot will be. Your first lot does not have to be very big; as few as a dozen vehicles parked at your hourly rate should make you a nice sum each day. The second factor you have to look at is traffic flow in and around the lot. If there are no cars passing a lot, your pool of potential customers is going to be very small.

Building Contract

The following suggestions should help you to create a building contract that will protect you during your new home construction:

• Make sure the building contract clearly explains both the builder’s and the owner’s financial responsibilities. It should be specific about what Is and Is not included, so that there are not any surprises or hidden costs later. The driveway, sidewalk and landscaping, for example, are often not included in the quoted new home for example, are often not included in the quoted new home construction price.
• The contract should state who is responsible for paying utility tap-in fees and inspections it should also specify who pays for property surveys, building plans, appliances, and property stakes.
• Make sure the building contract refers to house blueprints, and make sure everything in your home Is plotted on the and make sure everything in your home Is plotted on the blueprints.
• Be very cautious when a builder tells you he is leaving items off of the blueprint so that you don’t have to pay property taxes on them. Although a lower tax bill would be appreciated, leaving items off of the blueprints leaves you without proof that those items were supposed to be included for the quoted price.
• Make sure the building contract specifies a cost ceiling. Some builders do not know how to accurately estimate building costs. Protect yourself so that their problem does not become your problem.
• Make sure the building contract includes an escape clause for you in case the appraised value of the home (which Is usually based on the blueprints) is substantially less than you are paying for the new home construction you are paying for the new home construction.
• Make sure the building contract specifies a completion deadline and specifies builder penalties for an unmet deadline. Mace sure the building contract indicates what must be done before the final payment Is Issued to the builder. You before the final payment Is Issued to the builder. Y

You might want to require that a subcontractor list, including subcontractor names, addresses, phone numbers and duties submitted to you before final payment is issued. You night submitted to you before final payment is issued. You night need this information in the event of a warranty claim and it may be difficult to obtain at a later time. You might also want to require that all warranty paperwork be presented to you before releasing the final payment.

Buying Mortgages Properties

Another unpleasant surprise many homeowners have faced is that of replacement value and coverage amounts Many policies cover the property for a specific dollar amount, and the annual increases in housing costs may mean that this amount is no longer sufficient to rebuild the home in the event of a fire or other total loss. It is a good idea for homeowners to opt for a policy that provides for replacement costs. Such a policy will pay the cost to rebuild the home, even if the value has increased significantly since the policy was first put into force.

All this coverage may sound expensive, and it can be, but the good news is that there are some ways homeowriers can cut down on the expense while still maintaining the proper level of coverage on their most important asset. One of the most effective ways to cut premiums without sacrificing coverage is simply to accept a higher deductible. Simply changing from the lowest deductible to the highest can result in significant savings without sacrificing one iota of coverage.

Of course many homeowners fear that they will not be able to afford the higher deductible, but a good solution to that problem is to earmark the premium savings to a special account. The purpose of this emergency fund is to cover account. The purpose of this emergency fund is to cover
the cost of the deductible in case an insurance claim must be filed. The premium savings al one can make this type of self-insurance viable, and many homeowners are using this strategy to protect themselves, their families and their homes,

The “complete tear-down” house is one that is in such bad shape that it requires major structural work. This work can include new plumbing, newwring, a new foundation, and even a completely new structure. This type of home is often seriously outdated in most or all aspects of the home.

Additionally, the floor plan istypically one that is no longer popular or even semi-desired in today’s real estate market. Furthermore, the “complete tear-down” house often has an existing defect that cannot be repaired or modified, but rather, must be eliminated with the total destruction of the home.

In most cases, the price that you will be required to pay for the properly will be much higher than the value of the land alone. However, essentially, the land is all that you are getting out of the deal since the house is a “complete tear-down” purchase. Realizing any kind of a profit on this type of venture can be difficult.

Going back to the factors that influence sales, one must also realize that housing prices can be influenced by the potential buyer’s need to purchase a home. However; not many homeowners are going to be willing to pay more than the current market price for the area.

Unfortunately, in order to recoup your investment, you will most likely need to place a price tag on the house that is more than the current market price. Avoid “complete tear-down” house and look for something that will bring in a more lucrative profit such as the “partial tear-down” or “fixer-upper” house for a better-investment opportunity.

Reverse Mortgages

The significant advantage of reverse mortgages is clear. This financial tool enables seniors to make use of their home equity in order to increase their standards of living in their senior years which are often characterized by a
shortage of liquidated financial resources This is especially valuable when other family members are unable or refuse to aid the senior with his financial situation. A reverse mortgage requires no guarantees on the side of the borrower aside from the property itself.

Mother advantage of reverse mortgages is that it enables seniors to support other family members today instead of as an heirloom. It enables seniors to decide how and when to an heirloom. It enables seniors to decide how and when to aid the potential heirs and is especially valuable when seniors still support their families. A reverse mortgage might also assist financing required payments for health care or nursing and also help finance the move to a retirement home.

The Big Mortgage Heist

The poignant images of families being evicted from their homes are splashed across the nation’s newspapers and television stations. One would think only those with the coldest of hearts could In any way construe these happenings as positive. There are obviously individual victims of the housing meltdown suffering terrible consequences. However, the alleged subprime crisis is not what appears to be at first blush.

Rational analysis reveals a different story altogether. Tales of losses emanating from the American subprime mortgage phenomenon incurred by myriad institutions around the world emerge on almost a daily basis. From Europe to the Middle East, no investment entity appears to have escaped its wrath It Is assumed by all that the subprime mess represents a financial disaster for both America and the rest of the world. That conclusion is only half right. To understand the current situation It is necessary to step back and examine its origins.

During the housing heyday of 2001–2006 many banks and other mortgage lenders engaged In what is now universally recognized as reckless lending behavior. Mortgages were written on the most dubious of transactions where the buyer had no down payment, and the appraisal was suspect. However, the lenders were able to sleep at night Just fine This was because, via the magic of a collateralized mortgage obligation (CMO), they were able to transfer the risk of default to a third party.

These parties Included Investment banks, hedge funds and sovereign wealth fund s from everyplace under the sun. The shocking revelation that those with without income couldn’t afford to service a $500,000 mortgage became evident during 2007. The investors who purchased these CMOs were left holding the proverbial bag. The figures vary, were left holding the proverbial bag.

The figures vary, but many pundits put the total losses at over half a trillion dollars. As indicated, the final recipients of these hot potato CMOs hall from all comers of earth. Losers are located from Belgium to Beijing. The salient question then becomes to whom they lost this exorbitant amount of money. The winners include several hedge funds and institutional investors who made fortuitous bets by selling short CMOs at their zenith.

Other beneficiaries include the corporate executives at various lenders who walked away with much publicized paychecks. However, the gains experienced by these two categories combined account for but a small fraction of the hundreds of billions of dollars lost. Where did the rest of it go?

It went to a large swath of Americans This first on this list are all those lucky enough to sell their home while it still retained the inflated value Imparted to it by loose still retained the inflated value Imparted to it by loose lending standards. Much of the proceeds from these soon to be collateralize mortgages went to the sellers of the underlying properties.

Billions of dollars lost by institutions ended up In the bank accounts of these Americans who exercised shrewd timing in knowing when to sell. Those who have recently sold a property realize immediately that most usually six percent of the Rile proceeds goes that most usually six percent of the sale proceeds goes right Into the pockets of the realtors.

Billions of dollars lost via CMOs ended up with a diverse group of real estate agents domiciled throughout the entire country. The estate agents domiciled throughout the entire country. The excess earnings experienced by realtors due to the housing bubble were shared through taxation of earnings and the all the local economies where the money housing bubble were shared by Uncle Sam through taxation of earnings and the all the local economies where the money earnings and the all the local economies where the money was eventually spent.

Add to the list title agents home inspectors, construction workers, home builders and other developers large and small. They are the ones who benefited from the large provided by supposed professional investors gigantic losses. For every loser there Is a corresponding winner. The net result of the CM 0 frenzy was a massive wealth transfer from the international financial community directly to Main Street, U.S.A.

One could sardonically that China sends over poison toothpaste and we return the favor by selling them poison CMOs. Others would point to losses suffered by Middle East investors as refunding back a portion of the oppressive prices we currently pay at the pump. Whichever metaphor is used, it is clear that the real winner in the overall equation is America with the net losers being the rest of the world.