Category: Real Estate

  • The Clarence Lifestyle Center: 7 Things to Consider before Signing a Commercial Lease.

    The Clarence Lifestyle Center: 7 Things to Consider before Signing a Commercial Lease.

    You might have heard that the Eastern Hills Mall in Clarence is considering the possibility of undergoing a significant renovation. As development in Western New York continues to surge, the Mall, a 20th Century concept, is positioned to either adapt with the times, or be a relic of the past. This blog post will explore several important things to consider if you are interested in signing a commercial lease.

    Recently, the Clarence Town Board created a Lifestyle Zoning Code, seeking to create an overlay district of both commercial and residential activity. Although no zoning changes have been made to the Eastern Hills Mall property, a zoning change, if approved, would allow development of a modern center for living and commerce with smaller, more upscale retail stores, more walkability, and the possibility for residential living spaces to be developed. Considering that the health of dated Malls in Western New York is not strong, and that Clarence is actively trying to manage the commercial feasibility of the mall, there is great potential for business growth at the new center and even the areas surrounding the property.

    If the Mall underwent such a drastic change, it may provide a fertile ground for investment considering the prime location of the property and the buzz a new mixed-use retail and residential space would generate. Regardless of the location, there are certain things to consider before signing a commercial lease.

    1. Term Length:

    Most commercial developers prefer to lock in tenants to long-term leases. This enables developers to more easily recoup the costs of their investment. Hiring brokers, advertising the space, as well as any time the space is unoccupied, all cost the developer money. Further, a substantial overhaul of existing commercial space may be facilitated through debt financing (i.e. bank loans). This means that due to financial constraints (i.e. loan payments), property owners that recently renovate their space are unlikely to accommodate shorter lease terms for seasonal or start-up businesses.

    1. Rent Increases:

    It is important to review the lease carefully to understand how your rent can be increased. Most lease agreements will have stated rent levels for each year of the lease. Some commercial leases may tie rent increases to inflation, which changes from year to year, but generally has hovered around 2% in recent years.

    Many lease agreements also require tenants to shoulder the costs of improvements made to the overall property. For example, the property owner’s cost to repairs to HVAC systems, elevators, parking, interior structures, or even real estate tax increases may be passed on to the tenants.

    1. Breach, Default, & Legal Action:

    While no new business wants to think about it, it is important to familiarize yourself with the termination and breach sections of your lease agreement. Lease agreements may limit your ability to terminate the lease, go to court, seek damages, or may even require you to bear the property owner’s legal costs in the event of a dispute. As the property owner drafts most lease agreements, they slant heavily in their favor. First time lessees should beware.

    1. Tenant Improvements to the Space:

    Owners of older commercial spaces will likely be more permissive in allowing tenants to renovate or modify the space to improve its overall commercial attractiveness. They are also more willing to negotiate temporary rent abatement in exchange for the tenant bearing the costs of improvement. The catch here is that any improvements must remain after the expiration of the lease. New commercial spaces are different. The property owner may be less willing to offer rent abatement, and may not allow modification of the space. Make sure to be aware of these restrictions before signing, and evaluate how they affect your business.

    1. Know Your Competition:

    This Clarence Lifestyle Center will likely have a strong demand for a fitness/workout facility, an upscale health food store, and an entertainment complex for residents or shoppers. If you are in the business of providing any of these services or products, you may want to negotiate a clause with the property owner that restricts other tenants from providing similar services.

    1. Hours and Logistics:

    Consider the hours of operation for the mall or commercial space. Malls typically require tenants to maintain the same business hours, or greatly limit their flexibility to change hours or days of operation. You should consider how these restrictions might affect your operating costs.

    You should also consider the amount of parking available. Does your business experience an even flow of customer traffic? Or does it experience periods of high volume and low volume? If the commercial space does not have adequate parking to accommodate your customers, your business will likely suffer. You may wish to consider negotiating designated reserved parking with the property owner.

    1. Hidden Fees:

    Check if the lease requires the tenant to pay for business essentials such as high-speed internet connectivity, property maintenance, or property taxes. These fees will add up and affect your bottom line.

    Having an attorney review your commercial lease agreement is the best way to protect your interests.For more information, or to have your lease agreement drafted or reviewed, pleasecontact our officefor a free consultation.

    Disclaimer: This blog is made available by Kloss, Stenger & LoTempio for educational purposes only. It is not intended to provide legal advice nor form any attorney client relationship between the reader and Kloss, Stenger & LoTempio. You should always seek professional advice from a licensedattorney for any legal questions you may have.

  • 7 Things to Remember When Buying a Home

    7 Things to Remember When Buying a Home

    #1. Be Patient.

    Buying a home can be one of the most exciting and stressful times of your life. It is easy to become overwhelmed. Through it all, the most important thing to remember is to be patient. The average closing takes between 30-60 days from the signing of the contract to the closing table. This may seem like an eternity, but rest assured, there is a lot to do in that period, as you will see below.

    #2. Get Pre-Approval for a Mortgage.

    Before submitting an offer on a house, you should apply for a mortgage pre-approval. It is better to work with a local lender if possible, as closings will typically move faster. Your lender will guide you through this process, and you will need to work diligently with them to secure financing. The pre-approval process will also allow you to better understand how much house you can afford.

    #3. Do not make any drastic career or financial decisions during this time.

    Changing jobs or careers during the home buying process can affect your ability to obtain a mortgage and close on the sale. Lenders will look at your financial history and any disruptions or significant changes can make them more reluctant to lend.

    #4. Do Your Homework when House Hunting.

    Do your homework when searching for a house. Make sure that the house is not just the right house, but that it also fits within your budget. You should compare prices of similar homes in similar neighborhoods. It is also a good idea to see what price homes in the neighborhood have sold for in the past.

    After you have toured several houses, and narrowed your choices down to one, it is time to submit an offer. Once your offer is accepted, you will sign the purchase contract. Now things will move quickly for the next two weeks.

    #5 Have an Attorney Review Your Contract.

    The very first thing you need to do after signing your contract is to contact an attorney. This is very time sensitive. The standard real estate purchase agreements have an attorney approval contingency requiring attorney approval within 2-3 business days. This means that your attorney needs to review and approve the sale within that time.

    Your attorney will review your contract to make sure that it is fair to you and identify any potential issues. After the attorney completes the review, they will issue a letter to the seller’s attorney approving the contract or disapproving the contract with proposed changes. This process usually takes a day or two. A good thing to do during this time is to speak with your attorney or their paralegal regarding what documents they will need from you.

    #6 Get Your Home Inspected.

    After the attorneys send their approval letters, you should arrange to have the house inspected. If you do not know any inspectors, your attorney can recommend one to you.

    Your inspector should be thorough and not afraid to get on a ladder and poke around. After your inspection, a Property Inspection Notice and Addendum (PINA) will be completed by you and the seller. The PINA will be included with the purchase contract.

    #7 Have a Closing Checklist and Use it.

    Then the process will slow down – a lot. Draft a checklist during this time of all of the items that you will need to complete before closing. Ensure that your lender’s requirements will be met, price out and pay for your first year of Homeowner’s Insurance, start packing, pick up a new hobby or just relax. While this is going on, your attorney is working to obtain approval to close on the house from your lender’s attorney.

    And, then the fun begins again.

    Once you get the final clear to close, and the closing is scheduled, arrange for a final inspection of the house. At this time, you and the seller will need to determine who will have the keys, garage door openers, key codes, etc. to the house post-closing. A day or so before the closing, you will need to call the utility companies and municipal water to have the bills changed to your name.

    Your lender will give you a Closing Disclosure Statement three days before closing that lays out how your loan is going to be disbursed and any checks you will need to bring to closing. Your attorney will walk you through this and answer any questions that you may have.

    Attend the closing, sign your name 200 times (give or take 100) and, surprise! You are now a homeowner.

    Having an experienced attorney review your contract and guide you through the home buying process is the best way to ensure a successful closing.For more information, pleasecontact our officefor a free consultation.

    Disclaimer: This blog is made available by Kloss, Stenger & LoTempio for educational purposes only. It is not intended to provide legal advice nor form any attorney client relationship between the reader and Kloss, Stenger & LoTempio. You should always seek professional advice from a licensedattorney for any legal questions you may have.