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Broker Services (2):

I want to take an option on a property in Denver, but the owner has some requests I don’t understand. Can you help?

“Taking an Option” on a property can be contracted in various forms as there are a lot of variables that can transpire over the time period between your “taking an Option” and your exercising the Option that needs to be considered.

 

As a buyer, the longer the option period, the more risk you are taking.  That said, your questions below are typical questions in a real estate purchase agreement, regardless of the fact that you are contemplating an Option contract.
Let me try to help you.

 

Owner Request #1:

1: Buyer shall obtain, at Buyer’s expense, a current title commitment providing for an extended coverage owner’s title insurance policy in an amount equal to the Purchase Price.

 

Typically, in the Denver market, a seller pays for the title insurance policy, so this paragraph asks you to pay. Without knowing the proposed purchase price, I cannot tell what cost you should expect.

 

Owner Request #2:

2:  Buyer will indemnify Seller for any damage, loss, and liability which Seller may suffer as a result of Buyer’s acts with respect to such inspections, surveys, tests, and studies of the Property.

 

This paragraph says if you drill holes in the ground for testing or remove siding to look at the structure, or for any reason “disturb” the property, you have to put it back in good shape if you don’t close. No need to be too concerned here.

What does it cost to use a broker to help me lease space or buy a building for my business?

Usually nothing, in fact it actually can end up costing you a lot more not to use a broker. Any time you engage a landlord or a landlord’s broker about leasing/buying space or a building, they have one person’s interest at heart and it’s not yours. By using a broker, you ensure that someone on your behalf is looking out for your interests. Furthermore, a broker has the expertise and knowledge to help navigate you and your business through the vast complexities that encompass a real estate deal. I have seen it time and time again where someone didn’t use a broker and didn’t catch, include or missed a major component that cost them significantly. A broker can provide you a network of information that can save you considerable amounts of money and time. We are here to assist and make sure any decision you make is a good one.

Investor Services (1):

Clarification of Assignment

Q: As a seller, we received the following clause in a commercial offer, and are wondering what it means or if we should be concerned.

10.   ASSIGNMENT:  Purchaser shall be allowed to assign all or any portion of its rights or obligations hereunder without the prior written consent of Seller.  Notwithstanding the foregoing, but expressly subject to all terms, conditions, liabilities, and obligations hereunder, Purchaser may assign this Agreement to an entity partially owned and controlled or partnered with by Purchaser with prior written notice to Seller but without Seller’s consent; provided Purchaser is not released from obligations under this Agreement.  As used herein, “control” means the ability to direct the management decisions of such assignee by reason of the relationship interests in the assignee.

Your assistance in this matter is greatly appreciated.

 

 

A: The clause is contradictory: first it states….

“Purchaser shall be allowed to assign all or any portion of its rights or obligations hereunder without the prior written consent of Seller.”

Of course you do not want the buyer to be able to assigning the contract to anyone without your consent. How would you know if the person they are assigning it to can actually close?

Secondly is states….

“Notwithstanding the foregoing, but expressly subject to all terms, conditions, liabilities, and obligations hereunder, Purchaser may assign this Agreement to an entity partially owned and controlled or partnered with by Purchaser with prior written notice to Seller but without Seller’s consent; provided Purchaser is not released from obligations under this Agreement.  As used herein, “control” means the ability to direct the management decisions of such assignee by reason of the relationship interests in the assignee.”

This is a more common assignment clause where a buyer may want to assign the contract to a new purchasing entity (i.e an LLC or a Corporation). In this scenario, the byer can assign without seller’s permission as long as the buyer is still a controlling person in the new entity. (i.e a 50% or more ownership)

In either case you are best protected if seller must approve ANY assignment.

 

MAYBE YOU REWRITE THE PARAGRAPH TO SAY:

10.   ASSIGNMENT:  Purchaser shall NOT be allowed to assign all or any portion of its rights or obligations hereunder without the prior written consent of Seller.  Notwithstanding the foregoing, but expressly subject to all terms, conditions, liabilities, and obligations hereunder, Purchaser shall be allowed to assign all or any portion of its rights or obligations hereunder with the prior written consent of Seller, WHICH WILL NOT BE UNREASONABLY WITHHELD, to an entity partially owned and controlled or partnered with by Purchaser; provided Purchaser is not released from obligations under this Agreement.  As used herein, “control” means the ability to direct the management decisions of such assignee by reason of the relationship interests in the assignee.

 

Micellaneous (1):

I have outgrown my current space and need to move. I have found another location that suits me better but I have almost 12 months left on my current lease. It is possible that the new landlord will pay off the old landlord so I can move early?

The simple answer is Yes. The more realistic answer is most likely not. Typically a new tenant will ask a landlord for free rents, tenant improvement money and other concessions as enticement to lease a particular suite. These concessions can quickly add up to equal 6-12 months of future rents. So, asking a landlord to make all the typical concessions AND pay off 12 months of your current lease is most likely not a reasonable prospect. On the other hand, maybe if you were to agree to take the new space “as-is” with NO concessions, then possibly the landlord would have money available to pay off your old lease term.

Property Management (1):

Can you help me to transfer a Liquor License?

Yes we can. Over the years, we have helped a number of individuals coordinate both the transfer of, or the full application for, a Liquor License. The process is not that tricky but it does involve numerous steps and payment of fees ranging from $3500.00 – $7500.00 depending on the type and current status of the license.

We are  able to direct you to the correct State agencies as well as introduce you to attorneys who specialize in this field of work.