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Recent Blog Posts
Evicting a Commercial Tenant for Rent Delinquency
Business owners of all types can experience a drop in sales and fall behind on their bills. Unfortunately, when this happens, it can leave the landlord in a difficult predicament. On the one hand, commercial property owners know it is usually easier to keep a current tenant than it is to find a new one, so they may be willing to wait out a slow season for a delinquent commercial tenant.
On the other hand, the lack of payment can cut into the investor's profits, perhaps to the point that it places them at risk for financial problems themselves. As such, it is important that investors not only understand the eviction process for a commercial tenant who is behind on their rent, but that they also carefully consider their options before moving forward with the process.
Should You Evict Your Commercial Tenant?
Small-Scale Investors to Be Denied a Break Under New Tax Law
The Tax Cut and Jobs Act went into full effect at the start of 2019. Sadly, this new law will fall short on delivering some of its promises. A prime example is the small business tax benefit, which was supposed to allow taxpayers who made less than $157,500 ($315,000 for a married couple) to deduct 20 percent of a pass-through business’ income from their overall taxable income. Yet, in what many call a “shocking” and “counterintuitive” move, the Treasury announced that taxpayers who use triple net leases will be blocked from claiming the deduction.
What might all this mean for your investment portfolio, and what can our seasoned Naperville real estate lawyers do to help? The following information explains further.
Triple Net Leases - The “Gold Standard” in Commercial Real Estate
For better or worse, triple net leases are considered the “gold standard” in commercial real estate - and for good reason. In addition to requiring the tenant to pay the landlord for their rent and utilities, they must also submit payment for any outstanding costs, such as those related to maintenance, insurance, landscaping, or property taxes. In short, triple net leases leave for the landlord to manage or check up on while renting out their property. They simply use the money to ensure that all costs related to the building are covered; the rest is considered their return.
What CRE Investors Should Know Before Adding Restaurant Property to Their Real Estate Portfolios
With more restaurants offering delivery services to their customers, and the popularity of food delivery services rising, the interest in the restaurant investment sector is growing at an unprecedented rate. Unfortunately, far too many investors dive into this industry without fully understanding its risks and nuances. As a result, they increase their risk of significant financial loss. Be proactive and avoid such a fate with help from the following information.
A Closer Look at the Restaurant Investment Boom
From a distance, it might appear that the entire restaurant industry is booming. However, upon closer inspection, current trends indicate that growth is confined mostly to Class A properties. All other properties are seeing little (if any) growth - and in many areas, closure rates for Class B and C restaurants are increasing. As such, investors wishing to break into the restaurant sector are encouraged to focus their sights on high-end properties. Just keep in mind that, because of the current boom, competition in the Class A restaurant sector is exceptionally high.
CBD Industry Offers New and Exciting Opportunities for Mall Owners
With widespread mall closures for retailers like Nordstrom, JC Penny, and Macy's, commercial real estate owners are scrambling to fill space. Two major mall franchises have announced plans to add CBD shops to their list of retailers. Learn more about this interesting development in the commercial real estate (CRE) industry, and how it could impact your bottom line.
Mall Franchises Partner with Major CBD Retailer
Two mall franchises, Simon Property Group and Brookfield Properties, recently announced their plans to partner with the major CBD retailer, Green Growth Brands. More than 200 CBD shops will be opened in malls across the country over the next year. With a strong growth history and high-quality products, the CBD company is expected to flourish inside of malls.
Specifically, Green Growth Brands will be featuring its health and beauty stores inside of malls. They own two specific (but different) brands - one focused on soaps and shampoos, the other on the empowerment and wellness of women. The opening of CBD flower shops is also expected in some locations.
Combatting the “Expectations Gap” in Commercial Real Estate
Most everyone knows what it feels like to plan something and set expectations on the outcome, only to encounter an obstacle along the way. Almost immediately, the bottleneck increases stress levels - because, as everyone knows, complications lead to delays and less than optimal results.
In the commercial real estate (CRE) industry, the space in which these losses occur in are known as “expectations gaps.” For the commercial investor and their team, the consequences of a gap can be dire, resulting in lengthy delays and lost income. Learn more about what causes these gaps, and how your firm can overcome them, in the following sections.
CRE Lawyers and CRE Investors - Results vs Expectations
Real estate attorneys are often seen as the “bad guy” in a real estate deal - the reason that bottlenecks occur. This is not the case, however.
Landlords Need to Heed Illinois Lead Laws
Lead can have a devastating impact on the mental and physical development of children. Sadly, the state of Illinois has one of the highest rates of lead poisoning in the nation. In fact, Cook County alone had more than 4,500 children who tested positive for lead poisoning last year. Some of these cases may have been the result of a lack of disclosure. This is allegedly the situation for one landlord who is now facing litigation.
Illinois Landlord Faces Litigation
In May of 2015, news reporters covered a story about two young children who had suffered from lead poisoning. Investigations from the Illinois Attorney General revealed that the lead had allegedly come from their apartment home. Their landlord had reportedly failed to take appropriate action, as required by the Cook County Public Health Department. Because of that, the Attorney General is filing suit against the landlord. This could ultimately result in a temporary closure of the property and hefty fines for any failure to comply with the stipulations for reopening the property.
Rent Withholding – What Every Tenant Should Know About the Right to Repair Act
Although most landlords work hard to keep their properties safe and habitable, some do not. The Residential Tenants’ Right to Repair Act outlines the recourse that tenants have in such situations. It also provides detailed information on the limitations of the Act, which must be followed to ensure the protection of your tenant rights. If you are experiencing poor living conditions or are struggling to have essential repairs made, the following can help you understand how this Act may apply to your situation.
Deducting Repairs from Rent Due
Under the Tenants’ Right to Repair Act, tenants have the right to use a portion of their rent to pay for necessary and reasonable repairs to their dwelling. This right is not without limitations, however. The tenant cannot simply make the repair. Instead, they must notify the landlord, in writing, by registered or certified mail. If a response is not received and the repair has not been made within 14 days of the receipt of the notice, the tenant may then pay a tradesperson to complete the repair. It should be noted that the amount cannot exceed $500 or one-half of the tenant's monthly rent (whichever is lesser). Further, the damage cannot have been caused by the deliberate or negligent acts of the tenant or their animals or visitors.
Tenant Protection for Illinois’ Domestic Violence Victims
Data from the National Coalition Against Domestic Violence (NCADV) shows that approximately 20 people per minute are abused by an intimate partner. In some cases, the violence extends beyond cuts and bruises; the victim's life is truly in danger. What does this mean for you as a landlord? The following explains the tenant protections offered to domestic violence victims under Illinois state law, and it provides you with details on where to find assistance if you need further guidance or advice in a specific tenant-landlord situation.
Examining the Tenant's Rights
Tenants who are being abused by a family member have the right to terminate their lease early, should they so choose. However, they can also request to have their abuser evicted and the locks changed. As a landlord, you are required to comply with these protections. You should also be aware that domestic violence is considered a viable defense to an eviction, which may already be underway by the time you learn of the abuse. Sadly, this can leave you feeling a little caught off-guard, and it may even cause you to overlook your own rights as a landlord.
House-Flipping at a 10-Year High - Could It Be Right for You?
House-flipping, defined as a house that is bought, revamped, and then sold within a 12-month period, is now sitting at a 10-year high. Experts say popular television shows are at least partially responsible for this hike. Unfortunately, such shows do not give an accurate portrayal of the industry and the challenges that house-flippers may face during the house-flipping process. Educate yourself on the process, and discover how a seasoned real estate lawyer may be able to help mitigate the risks and potential issues you may deal with along the way.
The Pros and Cons of House-Flipping
Under the right circumstances, house-flipping can be a lucrative market. Unfortunately, all the professionals that are needed to complete the process - real estate agents and brokers, builders, construction crews, etc - cut into your bottom line. You can increase your profits by learning more about the industry and expanding your knowledge (i.e. becoming a real estate agent), but one cannot realistically handle all aspects of their deals.
Real Estate Development: Top Strategies Employed by Savvy Investors
Even though the U.S. is well on its way to recovering from the recession, there are still investors who fail in the real estate development market. In contrast, there are those who consistently make money, despite any changes or fluctuations. The following strategies, employed by the savviest of investors, are often key in giving the latter their edge over the former.
Study and Know Local Pricing
Studying and knowing your local market is an invaluable strategy in real estate development and investment. Not only do you learn which prices are fair (which can assist in finding the best prices), you are also able to better stay ahead of the trends. Take, for example, an area in which home sales are accelerating at a faster rate than its neighboring towns or subdivisions; this can tip you off to areas that are currently in high demand.
Know How to Spot a Catalyst
1730 Park Street, Suite 117, Naperville, IL 60563
630-778-3818
