Former HUD secretaries: America’s elder

Former HUD secretaries: America’s elderly desperately need more affordable housing

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Interesting article regarding the financ

Interesting article regarding the financial backing and subsequent operations of Fannie and Freddie Mac

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Closings remain at 44 days for second mo

Closings remain at 44 days for second month.

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New FHA proposal puts reverse mortgages

New FHA proposal puts reverse mortgages above HOA super liens

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Gulf Coast Bank to expand to Dallas. htt

Gulf Coast Bank to expand to Dallas.

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Mortgage Brokers Association (MBA) Presi

Mortgage Brokers Association (MBA) President calls for reform of Government Sponsored Entities (GSE) administration to ensure the secondary market is standardized and efficient.

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TRID has resulted in more homebuyers rep

TRID has resulted in more homebuyers reporting that they are reviewing the mortgage documents. The involvement of homebuyers is the process is resulting in smarter homebuyers.

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Locally owned grocery store completes up

Locally owned grocery store completes update to facade for the first time in 31 years.

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The Three Approaches Generally Used By Attorneys When Drafting Sub-Leases

There are countless reasons why an individual or a business entity would enter into a sub-lease of a property. Whether one is moving-in or moving-out, there are numerous legal implications that must be addressed prior to signing a sub-lease agreement. In general, attorneys use three approaches in drafting and reviewing sub-leases namely: the All-Inclusive Approach, Incorporation by Reference, or the Haphazard Approach.

The All-Inclusive approach is when an attorney will build an entirely new lease but utilizes the prime lease as a reference. Meaning, in drafting the new lease, the attorney is addressing all the rights and obligations of the three parties involved (original lessor, original lessee now the sub-lessor, and the sub-lessee).

The Incorporation by Reference approach is when the attorney incorporates the entire original lease into the sub-lease. Meaning, the original or prime lease is used as the basis of agreement except for any provisions or terms that are expressly excluded or qualified by the sub-lessor and sub-lessee. This approach assumes the validity of the original or prime lease but also qualifies what obligations remain with which party.

The Haphazard approach is when an attorney changes the lease form to say sub-lessor and sub-lessee and inserts terms such as prohibiting each party from causing default under the primary lease. Largely, the parties are left wondering what the consequences or even the agreement really is in this approach.

Although these three approaches laid out above seem to be rudimentary and easy for anyone to apply, they assume an attorney level education and experience that one cannot take for granted. If one were to only look at the terms of a lease, one can see the legalese runs rampant and making the consequences widely unknown for breaches to the ordinary person. Thus, an individual must not take any provisions of a lease lightly as the legal consequences can vary in such capacities up to and including permanent harm to the individual or business entity.

Therefore, the three approaches generally used by attorneys in sub-leases drafting and review may seem basic and unsophisticated but in fact are quite the opposite. Be sure to consult a qualified attorney for your lease and sub-lease issues prior to signing the document. It is wise to always remember that person who negotiates more of the relationship upfront will be the one who spends less when a breach has occurred and often is in control of the outcome.

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5 Areas of Real Estate Law that Owner’s of Commercial (and Residential) Property Should Know.

The following is a list of areas of the law that owner’s of commercial and residential real estate should become familiar with, or at the very least have a relationship with a real estate attorney they can call on.

1.Contract Law

Contracts include acts of sales and leases. Contracts govern the relationships between the parties to the contract and the law merely supplements when the contract lacks clarification of an issue that has arisen. Moreover, contracts are a creature of state statute and the laws of each particular state will govern. Therefore, it is crucial to have the language as the basis of the contract be clear and correct in setting forth the agreement and the parties rights and obligations.

2. Land and Use Laws

As an owner, you must understand the limitations that are placed on your property. In addition to federal and state law, local ordinances are often the most complex and difficult laws to maneuver around. It is important to know whether or not your property can be used for retail or whatever purpose you bought it for or are leasing it for.

Generally, the landlord must apply for rezoning and conditional use permits. Do not cause an automatic breach of contract by leasing a property to someone when it cannot be used for such use as they intend it to be.

3. Landlord Tenant Laws

Landlord-tenant law is governed by state law and as a result varies greatly and can included municipal and local ordinances. The laws are intended to protect the rights of both parties in any rental or lease agreement. Common clauses included in rental or lease agreements include: payment of rental fees, taxation, rights of privacy, disclosures, duration, rights of termination, and much more.

Understanding Landlord-Tennant law is important for issues that include eviction, termination, or liability for damages. Therefore, if you are to rent or lease your property, it is advisable you become familiar with the laws so you are properly able to negotiate the terms of any rental or lease.

4. Disclosure Laws

Disclosures are the way in which sellers and lessors protect themselves from potential claims from buyers and lessees. Written disclosures effectively put the party being informed on notice of any defect, hazard, or risk that may exist or has existed on the property prior to the relationship. Therefore, it is through proper disclosures that a seller or lessor can effectively reduce their exposure to potential claims while still being able to utilize their property for revenue or for sale.

5. Insurance Law

Insurance is the way in which one protects their property. Due to the lack of federal law, the state government generally regulates insurance law where the property is situated. Thus, understanding your state insurance law is imperative to protecting your property.

Additionally, as the lessor of property (commercial or residential) it is advisable that you require the lessee to carry their own insurance policy on their property to protect their interests. This is because your insurance may protect some of the lessee’s property; it does not cover all of their property, such as equipment. Thus, insurance is pivotal to protecting both your property and the lessee’s and not having insurance is effectively not protecting yourself.

When In Doubt, Always, Always, Always Ask Your Real Estate Attorney:

The only more damaging mistake a person can make is to assume that either they know what to do or they make it up as they go. Don’t get trapped by a false sense of thinking you understand the law. Attend sponsored events to confirm your interpretation of the law. In terms of investments, the ROI you will receive from paying for clarification and advice on an issue from an attorney will far exceed the loss you expose your self to without it.

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