Commercial Landlord’s Guide to Letters of Credit
In virtually every commercial lease negotiation, landlords look for credit support to backstop a tenant’s obligations. Whether it is unpaid rent, repair obligations, or damages caused by tenant default, landlords want to ensure there is a readily accessible source of...
Caps and Floors on Seller Liability in Commercial Real Estate Purchase Agreements
When negotiating a commercial real estate purchase agreement, one of the most important—and often misunderstood—topics is the allocation of risk between buyer and seller after closing. While the purchase price is the headline number, the contract provisions governing...
How Real Estate Investors Can Transfer Property Into an LLC
Many real estate investors begin by purchasing investment property in their personal names. While this is common, it is not always the most strategic ownership structure. Transferring real estate into a limited liability company can provide liability protection,...
Structuring a Tenant-in-Common (TIC) Arrangement to Avoid IRS Partnership Treatment
Tenant-in-common (TIC) ownership structures are a common vehicle for commercial real estate investments, particularly where multiple investors pool funds to acquire a property. A properly structured TIC allows each investor to own a direct, undivided interest in the...
Drafting Tip: Addressing Direct Claims in Indemnity Provisions in Commercial Real Estate Contracts
In commercial real estate contracts, indemnity provisions are a foundational risk allocation tool. They are commonly used to shift responsibility for certain claims and losses from one party (the indemnified party) to another (the indemnifying party). At a high level,...
A Beginners Guide to 1031 Exchanges
The replacement property must be equal or greater in value. Paying taxes on a successful real estate transaction can significantly reduce an investor's return. Fortunately, a well-established legal strategy allows investors to defer capital gains taxes while...
What is a Choice of Law Provision in a Commercial Lease and Why is it Important?
When reviewing a commercial lease, the choice of law provision—also known as a governing law clause—is a common element that deserves attention. This clause identifies which jurisdiction’s laws will apply to the interpretation and enforcement of the lease. For...
What is a Memorandum of Lease and Why is it Important in Massachusetts?
In Massachusetts commercial real estate, understanding when and how to record lease-related documents can help protect long-term interests. One document that often comes into play for leases longer than seven years is the memorandum of lease—also known as a notice of...
What Happens to Commercial Real Estate Leases When a Property Is Sold?
In Massachusetts, commercial real estate transactions often raise an important question for both landlords and tenants: What happens to an existing commercial lease when a property is sold? The short answer is that the lease typically remains in effect, and the new...
Why Are Landlord and Tenant Indemnity Obligations Different in a Commercial Lease?
Indemnity provisions are an important component of commercial lease agreements, defining the extent to which each party is responsible for damages, claims, and liabilities arising from incidents related to the leased property. In essence, an indemnity provision is a...