We specialize in the following services:
Review and preparation of real estate contracts.
Commercial and residential real estate closings.
Mortgages and refinances.
Commercial and residential leases.
Commercial ground leases.
Condominium and real estate development.
Tax-deferred exchanges under IRC Section 1031.
Business entity selection and creation.
Review and preparation of business contracts.
Estate planning services such as Trusts, Wills and POAs drafting.
Nationwide commercial real estate matters
Review and Preparation of Real Estate Contracts
Should a real property lawyer prepare or review residential real estate contracts? Although the AS IS preprinted residential real estate contract has become the norm in Florida, there are numerous ways of interpreting and negotiating the clauses of the contract resulting in more, or less, expenses for each of the parties to the contract. A real property lawyer can help save, or at least prevent from spending, hundreds, even thousands of dollars in expenses when the contract is prepared by the lawyer, or at least reviewed by him prior to signing. The personnel in our law office has extensive experience in preparation and review of residential real estate contracts. We can help you save, or at least prevent you from incurring expenses that shouldn’t be your responsibility. It is highly recommended that a real property lawyer represent you at all times in your real estate transaction.
Should a real property lawyer prepare or review commercial real estate contracts? Commercial real estate contracts are complex and may result in additional and many times, unnecessary expenses, not only at closing, but also during the time that you hold the purchased property. It is imperative that a real property lawyer represent you in a commercial real estate transaction from the very beginning of the transaction, until its conclusion.
Commercial and Residential Real Estate Closings
Before the closing of a residential real property takes place, numerous steps need to be taken in order to prevent undesirable results and consequences after closing. The first step is normally the inspection of the property to ascertain its physical condition. Even if the contract is an AS IS contract, the buyer may try to negotiate a credit or repair to the property before the end of the period allowed for the physical inspection of the property and withdrawal of the buyer from the contract. This step in itself may represent hundreds, even thousands of dollars to the parties.
The residential real property should also be checked for open or expired building permits and for code violations. Failure to do so will result in the buyer assuming the responsibility to close open or expired building permits and code violations. The title of the property must be searched for government liens, mechanics liens, outstanding mortgages, judgments and other matters of record. A title insurance policy should be issued with as few exceptions as possible. If your attorney is not issuing your owner’s title policy, it is very important that he review the title commitment (similar to a binder in casualty insurance) and the title policy to prevent that unnecessary or adverse exceptions be included in your policy. If you are taking a mortgage to purchase the property, the bank must be issued a lender’s title policy in order for the bank to lend you the mortgage. Finally, if the property being purchased is not a condominium, then a survey may need to be prepared to determine that there are encroachments affecting the property.
In the case of a commercial real property, all of the above steps should be carefully undertaken, and in addition, a review of all leases, restrictive covenants and other matters specific to the property should be reviewed.
Finally, if the seller is not a resident or citizen of the United States, the Foreign Investment in Real Property Tax Act (FIRPTA) requires the buyer to withhold part of the proceeds of the sale to the Internal Revenue Service. A representation by a real property lawyer is of outmost importance to prevent undesirable fines and expenses for failure to timely withhold and forward these proceeds to the government.
Mortgages and Refinances
Many residential and commercial real estate transactions require that the buyer apply for a mortgage for part of the purchase price. In other instances, the owner of a real property may consider it desirable to refinance its present mortgage to reduce the interest paid, to reduce the monthly payments, to replace a mortgage that requires payment of the outstanding balance in the near future, and for a number of other reasons. The bank will require, among other things, that the title of the property be searched, and that a lender’s policy be issued to protect the bank’s interest. If you don’t have a real property attorney to represent you, the bank will appoint an attorney, at your expense, to perform a title search for their protection.
Commercial and Residential Leases
Single-family residences and condominiums may be rented and a lease agreement may be prepared outlining the rights and obligations of each of the parties, normally outlined in the terms and conditions of a residential lease. Commercial property leases are almost always written contracts and may be complex and elaborated and under no circumstances should be accepted or signed without the careful scrutiny and participation of a real property lawyer.
Commercial Ground Lease
A commercial ground lease is a special and elaborate real estate contract that may involve development, financing, construction, leasing, and even sale of commercial real property by the tenant. Ground leases are used in farming, development of condominium projects, franchises, shopping centers and in many other real estate development projects. Typically the tenant intends to build or renovate improvements in the real estate grounds being leased by the ground owner. A ground lease is a low-risk way of professionally developing real property without major expenditures for the landowner, who in turn receives a long-term income stream from the developed property. Ground leases are particularly complex and should be undertaken only by highly experienced real property attorneys. Our office has participated in the development and closing of many ground leases throughout Florida and other states over the years.
Condominium and Real Estate Development
The development and creation of a condominium project involves the construction of multiple residential or commercial units in common grounds, in which each individual unit owner shares the ownership and expenses of the common areas of the condominium project, normally in proportion of the size of the unit owned to the total size of the common areas of the condominium project. Before any unit is sold to the public, a declaration of condominium must be prepared and recorded. The declaration of condominium outlines not only the operational aspects of the condominium project, but also the rights and obligations of the unit owners and of the association that manages the condominium project. In addition to the declaration of condominium, bylaws and creation of a non-profit corporation for the association are prepared. Rules and regulations for the entire project may also be included, as well as an initial budget and estimated initial assessments as well as surveys and plans for the entire project are included in the initial developmental phase of the condominium project. In addition, purchase contracts are prepared following the specifics of the project as well as requirements of law. The preparation of condominium documents is a lengthy process that must follow and reflect the parameters outlined in the law and regulations of the county and the state.
Real estate development projects such as single-family developments involve the surveying and platting of the property being developed, creating individual lots or parcels that will be improved by a single-family residence and sold to the public. Modern real estate developments will be subject to a declaration of covenants and restrictions that may include the right to impose assessments on each lot for the purpose of maintaining the common areas of the project.
Tax-Deferred Exchanges under IRC Section 1031
Whenever a real property is sold, the transaction normally constitutes a taxable event. If the seller’s costs and expenses are more than the purchase price, there will be a tax-deductible loss for the seller. On the other hand, if the seller’s sales price is more than its costs and expenses, there will be a taxable gain for the seller. If the seller has owned the property for more than one year, the gain will be classified as a capital gain, normally taxed at a lower rate than an ordinary (less than one year) gain. Nevertheless, if the gain has been substantial, the applicable taxes could amount to tens or even hundreds of thousands of dollars.
Fortunately, many years ago Congress created Section 1031 of the Internal Revenue Code, which allows the seller to postpone the payment of this gain tax, by allowing the seller to exchange its relinquished property for a replacement property or properties. In order to accomplish the exchange without payment of taxes, a rigorous schedule must be followed: The replacement property or properties must be identified within 45 days after the closing of the relinquished property, and all replacement properties must be closed within 180 days from the date of closing the relinquished property.
Business Entity Selection and Creation
There are many instances when an individual may desire to obtain the protection of a business entity. For example, when purchasing commercial property, or when initiating a business venture. There are numerous types of business entities available to the average individual. Professional , Profit and Nonprofit Corporations, Limited Liability Companies and Partnerships are among the choices available when selecting a business entity.
As experienced attorneys, we can help you select among the different choices and we can prepare all the documentation needed to create and operate a business entity in Florida, Delaware or any other jurisdiction of the United States and overseas.
Review and Preparation of Business Contracts and Purchase of Assets or Stock
The purchase and sale of business entities is very different from the purchase and sale of real property, and requires a different type of expertise. The purchase and sale of business assets or corporate stock is not regulated by any specific laws or regulations at the present time. The Bulk Sales and Transfer Act, the only law regulating these sales, was derogated in Florida many years ago, and Florida has not adopted Article 6 of the Uniform Commercial Code, which regulates bulk transfers. As attorneys in Miami, Florida for more than 40 years, we have prepared and reviewed numerous business contracts, in the context of a purchase of assets or corporate stock, and can help you with these transactions.
Estate Planning Services such as Trusts, Wills and Powers of Attorney
Estate planning encompasses numerous techniques that try to prevent that our loved ones be affected by life’s uncertainties. It tries to anticipate and arrange, during a person’s life time, the management or transfer of assets to his or her beneficiaries as efficiently as possible, minimizing the tax consequences of these arrangements. Wills, trusts, powers of attorney, and property arrangements such as life estates and others are commonly used to achieve these ends.
In many instances when a person dies, before his or her estate can go to his or her beneficiaries, the estate (assets less liabilities) must be probated. In the probate process the assets of the estate are collected, its debts are paid and the remaining property is distributed to the beneficiaries. If there is a Will, it must be probated before it is given legal effect. Once admitted to probate, the Will determines how assets are to be distributed. If there is no will, the assets will be distributed as determined by law. Probate proceedings are governed by state law. We can help you plan the transfer of your estate to avoid probate or to minimize the impact of creditors and taxes upon your estate.
Nationwide Commercial Matters
If you are involved in commercial real estate transactions outside of the State of Florida, we can help you with contracts, ground leases, franchise agreements, title policies and other related commercial real estate matters. We have represented clients in the purchase and sale of numerous commercial properties throughout the United States for more than 40 years.