Landlord Liability for Late Repayment of Security Deposits

Posted on December 19, 2011 by glmain

Practically every landlord of residential real property in New Jersey, including single-family detached houses, is covered by the state’s Rent Security Deposit Act. Under that statute, a security deposit is not an additional payment made by a tenant to a landlord, but a sum held in trust by the landlord for the tenant’s benefit except when the landlord is entitled to apply some or all of the deposit to cover unpaid rent or damage caused by the tenant.

The Rent Security Deposit Act imposes stiff penalties for a landlord’s failure to satisfy its terms. If you need advice about the best ways to stay compliant with the statute, discuss your options with a knowledgeable attorney at Accisano Law Offices in Freehold.

Double Damages for Untimely Return of Security Deposits

New Jersey law requires landlords to return the security deposit to a tenant (less unpaid rent or covered repair expenses) within 30 days after the tenant vacates the premises. Any deductions for rent or damage repair must be detailed in a list provided to the tenant. Landlords who do not make timely payment of damage deposits to tenants are exposed to double damages, that is, twice the amount unlawfully withheld, as a statutory penalty.

Property owners and managers need to have a clear idea of what can be properly withheld from the refund, with damage repair and cleaning expenses the most common points of confusion. While the landlord is entitled to recover repair costs for damage caused by the tenant that goes beyond normal wear and tear, the landlord should not charge for routine painting, maintenance or replacement costs. For example, replacing a worn carpet is not an allowable damage expense, but replacing one that was badly stained or burnt by the tenant can usually be charged against the damage deposit.

Similarly, tenants are responsible for leaving the premises “broom clean” at the end of the lease, but should not be charged for such cleaning expenses as window washing, carpet cleaning or refinishing woodwork. If you have any questions about allowable deductions from tenants’ deposits, a lawyer’s advice can give you a specific understanding of your rights and responsibilities.

Maintaining Damages Deposits in Interest-Bearing Accounts

Experienced landlords and property managers understand the importance of keeping security deposit funds in separate interest-bearing accounts. If you have 10 or more rental units, you are required to maintain such deposits in qualified accounts, and any failure to do so can result in the tenant’s right to request that the deposit be applied to past-due or future rent. The landlord has no right to request an additional deposit in this circumstance.

Landlords who operate at a smaller scale can also be required to maintain security deposits in an interest-bearing account at the tenant’s request. Interest on deposits needs to be paid annually to the tenant in the form of cash or a credit against rent due.

Call 732-462-5770 in South Jersey for Advice About Security Deposits

With more than 35 years of experience in landlord-tenant law, Accisano Law Offices has an established reputation for dependability and prompt service on behalf of residential and commercial landlords throughout southern New Jersey. To learn more about our state’s Rent Security Deposit Act and the ways it affects your business, contact us in Freehold for an experienced lawyer’s advice. You can also visit our website at http://www.acclegal.com.

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What Condo Associations Need to Know About New FHA Regulations

Posted on December 16, 2011 by glmain

New Federal Housing Administration (FHA) regulations issued in June 2011 impose a number of requirements on condominium associations before a condominium property can qualify for the advantageous terms of an FHA-backed mortgage. If you are involved with condominium management or a homeowners’ association, you will be doing your community a favor if you become familiar with certain features of the new FHA rules.

The FHA Approves Condo Groups as Well as Individual Loan Applicants

The main reason why every condominium board should understand the new FHA regulations is simple: to obtain FHA-backed financing, the condo project itself as well as the individual mortgage applicant must meet certain strict FHA criteria. The difference between a mortgage with FHA insurance and one without is substantial, and significantly affects the marketability of a condo unit. An assumable FHA mortgage at a fixed rate will expand your range of potential buyers. Additionally, the down payment for an FHA condo purchase will normally be a fraction of the 20 percent down expected these days for uninsured loans.

With these considerations in mind, residents of a condo development that qualify for FHA financing will find it easier to sell a unit, and the prices will reflect the more attractive mortgage terms that buyers can generally realize with FHA backing.

Condo Associations Need to Limit Maintenance Fee Delinquency Rates

If the condominium development experiences delinquency rates greater than 15 percent on maintenance fees, mortgage applicants for its units will not be approved for FHA loans. Condo boards therefore need to develop and implement effective measures for collecting past-due maintenance fees from owners and lenders. Homeowners associations should periodically review their delinquency rates to make sure that they are on the right side of the 15 percent benchmark.

Condominiums Must Also Maintain Minimum Reserve Funds

The FHA requires condo associations to maintain a reserve fund of at least 10 percent of their annual budgets. Although resident owners can be expected to balk at the prospect of increasing their own monthly fees, they will usually be quick to understand the benefits of eligibility for FHA financing.

Newer developments or those constructed and managed on green management principles can present the case for lower reserve contributions based on actual experience and documented expenditures. If your association can demonstrate lower reserve requirements, your association might be able to reduce its FHA reserve fund obligations to as low as 2 or 3 percent.

The FHA Restricts the Level of Condo Rentals for New Developments

Although waivers are available from the FHA for the time being, the agency’s June 2011 regulations announced a flat prohibition for FHA approval of loans in new condominium developments where any of the units are rented or leased rather than sold.

Because of the importance of condo rentals while new units are being marketed, the FHA set up a waiver procedure for avoiding this prohibition through March 2012. If you are involved with the management of a new condo project that relies on rental income in the near term, you should consult with an attorney to achieve FHA financing approval while some of your units are occupied under lease.

Questions About FHA Condo Rules? Call 732-462-5770 in South Jersey

With more than 35 years of experience in the law of condominium development, financing, regulation and litigation, the commercial real estate lawyers of Accisano Law Offices can help condo boards and homeowners’ associations become familiar with the FHA eligibility criteria for condo financing. For answers to specific questions or advice about particular problems, contact us in Freehold. You can also visit our website at http://www.acclegal.com.

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The Toughest Decision – Choosing Your Child’s Guardian

Posted on September 12, 2011 by glmain

By F. Patrick Accisano, Esq.

I have found that the most difficult part of estate planning for mothers usually has nothing to do with money or property.  Rather, choosing a guardian to care for the children is the most problematic issue.

The thought of someone else raising your kids is tough – it’s worse when your significant other has his own thoughts on the matter.  Hard as it is, it’s a choice that must be made.  If you do not appoint a guardian in an estate plan and the unspeakable occurs, someone else will decide who raises your kids.  It is important – this decision will ease the burden on your kids if something happens to their parents.

There is no “bright line” rule for making the proper guardian selection.  It depends on your situation.  However, there are some rules that can help.

Do what is in the “Best Interests of the Kids” – The standard to apply in making your decision is, “based on all circumstances, what is best for my child?”  This may seem self-evident, but it can get lost in the process.  When weighing your options, start and end with this question.

Define Your Ideal – At the outset, make a list of the traits that are most important to you in a guardian.  Consider maturity, stability, health, religion, marital status, current relationship with your children, moral values, area of residence, past parenting experience, etc.  Defining what matters most will give your evaluations direction.

Don’t Worry About Hurt Feelings – It’s the best interest of your child, not your parents, brothers, sisters, etc.  Choose the person who is best suited to raise your kids, and forget the rest.  Your loved ones should respect your decision.  However, if a possibility exists that someone will contest your decision, you need to tell your attorney.

Make a Comprehensive List – Write down as many candidates as possible.  Go beyond (but don’t exclude) your family.  Then, applying the factors described here, and all other relevant criteria, narrow the list to a select few.

Leave Little to Chance – Your estate plan may not become effective for years.  When it does, you will not be able to give further instructions.  Thus, try to minimize chance and plan for the unexpected.  Discuss your plans with the persons you have selected to see if they are willing (you can’t force a guardian to serve).  Even if they are, name at least one alternate guardian as a back up in case your primary predeceases you or changes her mind.

Be Time Sensitive – The guardianship provision in your estate plan may govern your children for years, especially if they are young.  Thus, you must be time and age sensitive.  While your energetic 65-year old dad may be great with your toddler, he may be unable to keep up with the demands of your teen when he approaches 80.

Work as a Team – If possible, it’s best for the estate plans of both parents to reflect each other to avoid conflicts.  Act as a partnership.  Before beginning, both parents should agree to engage in a dispassionate analysis, and to take no offense at the good faith opinions of the other.

This list is a starting point, and you will likely identify additional concerns.  But it’s worth the effort – a meaningful analysis by you will help your attorney prepare estate documents to assure that your instructions will protect your kids when they need it the most.

Freehold NJ Estate Administration Attorneys – (732) 462-5770

Contact F. Patrick Accisano at the Accisano Law Offices in Freehold for estate administration or probate issues.  Visit our website at www.acclegal.com for more information.

 

 

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Hurricane Irene Property Damages

Posted on September 7, 2011 by glmain

Owners of properties that were damaged by Hurricane Irene are now facing the difficult question of who is responsible.  If your property was damaged by fallen trees or landscaping from neighboring lands, then you may have recourse to obtain a money judgment to help cover the costs.  Further, if any trees or valuable landscaping was damaged during the clean up after the storm, you may also be able to state a claim for money damages.  These claims often involve issues related to trespass and property lines which require the attention of experienced real estate attorneys.  Please contact the Accisano Law Offices for a free phone consultation to determine whether you would qualify for such relief.

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Negotiating Commercial Mortgage Terms

Posted on September 7, 2011 by glmain

Legal Advice for Owners and Investors of Income-Producing Property

Owners of commercial real estate need to depend on positive margins between the revenues generated by their properties and the costs of borrowing, but the nature of commercial real estate rental and mortgage markets can make the necessary balances difficult to achieve and maintain over time. The advice of experienced commercial real estate attorneys can help commercial borrowers improve the terms of their mortgage commitments while expanding their options for taking advantage of market swings either in the leasing business or in mortgage interest rates.

Contact Accisano Law Offices in Freehold to learn how our lawyers can protect your interests in commercial property mortgage negotiations and documentation. We can show you how to make the most of your leverage in obtaining attractive mortgage terms in new financing, refinancing and interim financing for construction or renovation.

Professional Advice for Professional Real Estate Owners and Investors

Close attention to the cash flow necessary to meet the mortgage payments on profitable terms is essential in commercial mortgage borrowing, but favorable interest terms, amortization schedules and loan-to-value ratios are not the only factors to consider in securing mortgage financing. Commercial real estate owners need to understand the effect of prepayment penalties, cross-default and cross-collateralization terms, or personal guaranties on the continuing securities of their investments.

Our role as commercial mortgage counsel for the borrower is to make sure that our client understands the significance of the lender’s initial terms while working to ensure that the final mortgage loan agreement reflects our client’s interests and priorities to the greatest degree possible.

Negotiating Alternatives to Unfavorable Prepayment Terms

Many of our clients find that the prepayment penalties for retiring mortgage debt prior to maturity can be especially problematic. The ability to periodically refinance or liquidate a high-interest property without penalties to the borrower adds considerable flexibility to the management of a commercial property portfolio. While lenders are generally interested in yield maintenance terms that essentially assure the value over time of a particular loan, the borrower can negotiate for defeasance rights.

Here’s how mortgage defeasance works: Under certain market conditions, the borrower can profitably replace the collateral represented by the property with U.S. Treasury securities that will yield an equivalent cash flow to the lender over the same period of time at virtually no risk. Meanwhile, the borrower obtains a release of the collateral and relief from a high mortgage rate.

Another approach to prepayment that works satisfactorily under certain business models is a graduated prepayment option, which reduces the penalty as maturity approaches.

Avoiding Cross-Default, Cross-Collateralization or Guaranty Terms

Borrowers on the security of commercial real estate should be wary of additional mortgage terms such as personal guaranties, cross-default or cross-collateralization terms. Commercial property lenders typically look more to the value of the collateral and less to the creditworthiness of the borrower in making loan decisions, and typically lend at a lower percentage of value than residential lenders. Such additional security in favor of the lender is generally unnecessary in the usual situation.

In fact, most commercial properties will be titled in single-asset LLCs in order to insulate the nominal borrower from competing claims in the event of bankruptcy. Unless the bank is financing other operations of a diversified borrower, it is usually possible to avoid personal guaranties or cross-default or collateral clauses.

Call 732-462-5770 in Monmouth, Ocean, Middlesex and Mercer Counties

The commercial real estate and leasing attorneys of Accisano Law Offices have more than 35 years of experience on behalf of property owners, managers, leasing agents and investors in southern and central New Jersey. Our familiarity with the practical aspects of commercial property financing can help participants at any stage of growth or scale in this dynamic market. Contact us in Freehold for additional information or drafting of CAM terms in retail, office or industrial property leasing or visit our website at http://www.acclegal.com.

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Protecting Landlord Interests When the Tenant Files Bankruptcy

Posted on August 8, 2011 by glmain

The last several years have presented formidable economic challenges for businesses in all sectors, and not all survived to see the recent recovery gather strength. Even now, many small and mid-sized businesses remain vulnerable to financial crisis in the form of increased overhead, the cancellation of key contracts, and profound weakness in public finance.

At Accisano Law Offices, our attorneys advise commercial landlords throughout central and southern New Jersey about their options in the event of a tenant’s insolvency or bankruptcy. Although the U.S. Bankruptcy Code affords a measure of protection to landlords, understanding just how and when to mobilize rights provided under the Code will be essential to minimizing the landlord’s exposure to loss.

Anticipating the Need for Bankruptcy Advice Based on Tenant Defaults

The time to start thinking about bankruptcy considerations in a troubled lease situation is actually prior to the tenant’s bankruptcy case. The commercial landlord is often in a good position to spot the signs of insolvency well in advance of a Chapter 7 or Chapter 11 filing — not only will the rent be in arrears, but the landlord might also have received notice of unpaid utility bills or insurance premium to suggest broad-based financial problems.

While many landlords will try to work out a rent default problem with the tenant, care must be exercised to make sure that any curative measures taken by the debtor will actually stick. For example, if the debtor pays several months’ rent at once just a few months before seeking bankruptcy relief, the landlord may find that the lump sum payment is a voidable preference in bankruptcy and may need to be turned over to a trustee or the debtor-in-possession.

Businesses file for bankruptcy in response to any number of financial pressures, most of which have nothing to do with the lease. Regardless of the problems that landed a particular business debtor in bankruptcy court, the Code clearly specifies that any lease of nonresidential real property will need to be dealt with relatively early in the bankruptcy case.

Assumption or Rejection of the Lease Under the Bankruptcy Code

The debtor may assume, reject, or assume and assign an unexpired commercial lease within the first 120 days after filing the bankruptcy petition. This time period can be extended by the court for cause shown only once and for only 90 days. Any further extension will require the consent of the landlord. Any lease not assumed within this period, as extended, will be considered rejected and the debtor will need to quit the premises.

The specific claims of the landlord in bankruptcy vary a great deal depending on whether the lease is assumed or rejected, or even whether the lease was in force as of the time of the bankruptcy petition. If the lease was effectively terminated through judicial action or expired by its terms prior to bankruptcy, the landlord should be able to recover the premises quickly through application for relief from the automatic stay.

Landlord-Tenant Disputes Over Section 365 Lease Issues

More complicated situations arise when the debtor still has rights in the lease as of the time of bankruptcy. (Note that termination clauses based on insolvency or bankruptcy will be disregarded in bankruptcy court.) In many situations, the debtor and the landlord will dispute the details of the debtor’s motion to assume the lease under Section 365 of the Bankruptcy Code.

In order for assumption of the lease to be approved, the debtor must cure prepetition defaults, compensate any financial losses caused by pre or post-petition defaults, and provide adequate assurance for future performance of all lease obligations going forward. The landlord can contest all aspects of the debtor’s proposal to satisfy these three requirements.

Landlord Claims in Bankruptcy: Call Accisano Law Offices at 732-462-5770

As well as guiding landlords through the bankruptcy lease assumption process, knowledgeable lawyers can also help them understand the various kinds of claims the landlord may hold against the bankruptcy estate, ranging from unsecured claims without priority for prepetition defaults to priority administrative claims for rent due after the bankruptcy was filed.

For additional information about the landlord’s right to recover the premises or collect unpaid rents in commercial bankruptcy cases, contact Accisano Law Offices in Freehold, New Jersey. To learn more about our firm and our approach to client service, see our website at http://www.acclegal.com.

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Commercial Leasing in a Recovering New Jersey Market

Posted on August 2, 2011 by glmain

Experienced Attorneys for Commercial Real Estate Transactions

According to industry analysts, central and southern New Jersey commercial leasing is showing signs of sustained recovery through Q2 2011 across several measures: decreased vacancy rates, positive net absorption and higher rental rates per square foot. Now that the commercial real estate markets show signs of continuing strength, it’s a good time for both landlords and tenants to review the fundamentals of sound lease negotiation and documentation practices.

At the Accisano Law Offices, our commercial real estate lawyers have provided full-service, one-stop counsel to commercial landlords and tenants in central New Jersey for more than 40 years. We combine the strengths of a major law firm practice with the individualized and flexible client service characteristic of small law firms. With commercial real estate a core focus of our work throughout our history, we offer practical, sophisticated and cost-effective counsel on leasing and sales transactions.

Sound Legal Advice Backed Up by Practical Knowledge of the Market

Our understanding of local real estate markets adds considerable value to our advice. By staying current with the state of the markets on both local and regional levels, our lawyers can develop and execute negotiating strategies that can protect the value of the transaction for either side of the deal.

For example, commercial lessors accustomed to triple-net terms in their lease instruments might find that tenants are not as willing as they used to be to assume the indefinite risk of rising property taxes in an uncertain political climate. We can show you how to apportion that risk, often in exchange for higher square-foot rates that can protect the profitability of the transaction.

Avoiding Future Problems Through Negotiation and Documentation Skills

While a big part of the attorney’s role in commercial lease negotiations is to identify areas of possible liability and litigation risk, experienced lawyers know how to keep the transaction moving forward to closing by solving problems as they come up. As seasoned real property litigation attorneys, we know how lack of foresight or poor drafting can lead to expensive disputes and lawsuits. The Accisano Law Offices therefore works to minimize the potential for litigation through careful negotiation, document preparation and risk management strategies that have proven their value over time.

Our advice can help you protect the value of your bargain with respect to all commercial lease terms and negotiation problems:

  • Base rent
  • Length of lease and renewal options
  • Expansion options
  • Common area maintenance expenses
  • Insurance coverage obligations
  • Sublease, assignment and succession issues
  • Parking
  • Tenant upgrades or alterations
  • Eminent domain
  • Nonmonetary covenants
  • Liquidated damages clauses
  • Personal guaranties

With more than 40 years of experience in commercial leasing and property purchase and sales transactions, the attorneys of Accisano Law Offices work with building owners, developers, property management companies, real estate investors, leasing agents, and the businesses and professional practices in need of office or commercial space.

Contact Accisano Law Offices in Freehold at 732-462-5770 begin_of_the_skype_highlighting 732-462-5770 end_of_the_skype_highlighting

To learn more about our experience with lease or sales transactions involving offices, retail, restaurant or industrial property, contact Accisano Law Offices in Freehold by phone or e-mail. To learn more about our practice and firm history, visit our website at http://www.acclegal.com/.

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Legal Advice About Alternative Energy Issues in New Jersey

Posted on July 13, 2011 by glmain

With an increasing public commitment at all levels of government to renewable energy and greenhouse gas reduction, property owners and developers need to become conversant with the range of legal issues that new building codes can raise for construction, rehabilitation and remodeling projects throughout New Jersey.

Compliance With New Energy-Efficient Building Standards

The real estate and land use lawyers of Accisano Law Offices are familiar with the impact of the new energy conservation codes that came into full effect in March 2011. We can explain how to achieve compliance with the state’s implementation of federal International Energy Conservation Code (IECC) requirements for residential properties, and the more stringent 2007 ASHRAE standards applicable to commercial buildings and projects.

As well as offering advice about state and local compliance concerning a building’s energy consumption and conservation performance, our attorneys can also advise landowners and entrepreneurs about the legal, land use and business aspects of alternative energy development in coastal areas, on preserved farmland and in subdivisions or commercial developments.

Comprehensive Legal Support for Green Energy Projects

We can show you how land use regulations, exceptions to zoning restrictions, tax credits and loan or grant programs can all apply to your green energy project, whether it involves solar or wind energy, biomass, alternative fuels or other innovative approaches to power generation, consumption or sales.

Our ability to integrate effective legal counsel across the disciplinary lines of real estate law, environmental law, municipal law, zoning and land use regulation, and commercial law makes the Accisano law firm a sound choice for New Jersey businesses and entrepreneurs interested in pursuing the opportunities inherent in green energy generation and commerce.

Contact Accisano Law Offices in Freehold, New Jersey

For additional information about your specific situation, contact us in Freehold. To learn more about our practice and approach to client service, see our website at www.acclegal.com.

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New Jersey Attorneys for Commercial Landlords

Posted on July 12, 2011 by glmain

Integrating Legal Advice with an Awareness of Business Realities

Many experienced commercial property owners, management companies and leasing agents can handle much of their own legal work, particularly for such routine matters as lease documentation, lease renewals or notice to quit for default.

Knowing when to get legal advice for novel or challenging situations, however, can be difficult. As a general rule, you should contact an attorney whenever you suspect that the situation before you could lead to litigation or presents a tough choice between protecting a current right or interest and preserving a valuable long-term relationship.

Commercial Lease Enforcement That Makes Commercial Sense

At Accisano Law Offices in Freehold, our commercial leasing practice integrates a thorough understanding of New Jersey real property and contract law with a solid practical knowledge of commercial leasing markets. Our lawyers know how the balance of power between landlords and tenants can shift with market conditions. We therefore know how to make sure that our legal advice and strategies reflect the practical business realities of a given situation.

For example, if a key tenant in a mixed-use commercial development runs into problems with performing on lease terms negotiated during better economic times, you have the right to terminate the lease and recover possession, but that’s not necessarily your best move. Unless you have a new tenant committed to move in when you evict the old one, you might find yourself worse off than you were before — especially if the departure of the tenant in default begins to affect the business of the other tenants in your development.

Experienced commercial real estate attorneys deliver legal advice that takes full account of business and market conditions. In the example noted above, the right course of action might turn out to involve a strategy that simultaneously protects your right to evict at a time of your choosing, initiates a renegotiation process to give the tenant a reasonable chance of continuing in the space, and considers the impact of your action on the problem lease on the other commitments you have in place in the particular building or mall.

Understanding Timing as a Factor in Lease Enforcement Decisions

The importance of timing in considering the landlord’s options is hard to overstate. When does the problem lease expire? Does a problem tenant have an important contract or new investment coming up any time soon? What other financial pressures is it operating under? What’s the trend for commercial vacancy in your area — improving, declining or flat? Answering these questions is generally essential to defining a sensible lease enforcement strategy.

In strong leasing markets of course, a commercial landlord will not only look to maximize the rental income for property in demand, but will also seek to lock in high rates for a long term. Additionally, the landlord has the practical ability to use technical, nonmonetary or short-term defaults as grounds for eviction, thereby opening the door for a new lease agreement on even stronger terms. In the renter’s market that many of our clients have faced in recent years, however, owners have generally lacked the leverage to enforce lease terms to the letter, at least in a way that makes realistic business sense.

Call Accisano Law Offices in Freehold for Commercial Leasing Advice

To learn about the benefits of a relationship with commercial real estate lawyers who understand the challenges of lease enforcement under varying economic conditions in central and southern New Jersey, contact Accisano Law Offices in Freehold. For more information about our law firm and our experience, see our website at www.acclegal.com

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