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Entries in commercial property (8)

Monday
Jul172017

So You Say You Want a Revolution? Franchises Evolve as Retail Declines

Franchise Distribution Attorney Barry KurtzBar Certified Franchise & Distribution Law Specialist

by Barry Kurtz

818-907-3006

 

You’ve seen the news: retailers are struggling. Traditional anchor stores like Macy’s and Sears are closing up shop, creating a domino effect of fiscal death for shopping malls across the country. The Los Angeles Times reports over 8,000 retail stores may close before years’ end. 

Empty Food Courts Hurt Franchises

This is bad for Quick Serve Restaurants (QSRs) that have done a booming business in traditional mall food courts. But like all threatened species, there is a solution: Evolve. Though the traditional mall may be singing a swan song, other types of shopping complexes are doing good business.

Brick & Mortar Restaurant Locations

Not all malls are dead or dying, of course. And some properties will attempt a comeback through “experiential retail”, converting large anchor stores into movie theaters, restaurants, gyms, laser tag playgrounds or other facilities, which will hopefully lure back the smaller retailers as well as consumer foot traffic. But for franchisees leasing space in malls that are truly facing a decline, it may be time to revise a franchise agreement to accommodate a move to a more lucrative location. Consider alternative venues:

Outlet Malls: These still draw customers and generally have booming food courts filled with QSRs and other casual eateries. Many of them also lease space to family-friendly, full service restaurants as well.

Lifestyle Centers: Also known as boutique malls, these are mixed use commercial properties and popular draws for more upscale consumer spending. CityPlace in West Palm Beach or The Grove here in Los Angeles are prime examples. Single location restaurants and chains that are a little higher end tend to set out shingles in these locations. But QSRs may have opportunities in the surrounding areas.

Marketplaces: These settings are also on the rise in the U.S. Check out Grand Central Market in Los Angeles, or a venue like Underground Atlanta in Georgia.

Franchisees, consult with your franchisor regarding pulling up the stakes.

Franchisors, don’t allow franchisees to relocate at will; however, if a franchisee can make a convincing showing that relocation will be in the best interests of both franchisee and franchisor, the franchisor’s consent may be forthcoming. Consider the economic realities – franchisees who turn good profits make for a healthier system.

Food Delivery Services Help FranchisesOther Options for QSRs

Hanging on at the traditional mall food court to the bitter end? That’s understandable in some cases, as moves can be very expensive in terms of cash, lost customer bases and good employees who simply can’t commute to a new store further down the road.

Though foot traffic may be declining, digital sales are up. Consider a mobile delivery service or curbside pickup (consult with the mall’s management for this option) to bolster the account books.

A Morgan Stanley report says $210 billion in restaurant food is consumed outside of the restaurant from which it is ordered each year – though currently, only about five percent of that spend accounts for deliveries of online orders. But a writer for The Motley Fool projects a 15 percent growth in digital deliveries annually.

Whatever a QSR or other franchises decide to do – there are still plenty of options for business growth. You just have to embrace the change.

Barry Kurtz is the Chair of our Franchise & Distribution Practice Group.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Tuesday
Oct012013

Government Shutdown & How It Affects Your Business

Franchise & Trademark Litigation Lawyer

 

by Tal Grinblat & Stephen T. Holzer

818.990.2120

 

About 800,000 non-critical federal employees are out of the office today, and will remain out until Congress overcomes the impasse regarding the Affordable Care Act. In the meantime, the government shutdown – the first since 1996 – will affect more than your travel plans, but also your business.

Here's how:

1. Courts: Federal Courts will remain open, and operate for the first 10 or so business days as usual. As funding dries up, non-critical employees will have to be furloughed, which means a potential slowing of the judicial process.

Government Shutdown Business Affects2. Commercial Finance: Those seeking business loans and loan guarantees will see their plans impeded. The Small Business Administration saw an influx of loan applications just before the shutdown, which will slow the review process once the SBA resumes operations.

3. Contracted Projects and Construction: Companies with government contracts may not be able to apply for and obtain permits and reviews. Construction projects will shut down.

4. Corporate Strategy: Ready to alert the Federal Trade Commission of anti-competitive practices or unlawful trading? You'll have to wait. (The Security and Exchange Commission is open, for now.)

5. Employer Defense: Employers, you may get a bit of a breather if you're facing employee wage and hour, discrimination, or other claims.  

The Equal Employment Opportunity Commission will continue to process claims, but will not conduct investigations or participate in scheduled mediations. The EEOC will continue to accept charges for filing, to preserve claimants' rights.

The National Labor Relations Board will not process charges (though special circumstances apply), and will postpone hearings.

The Department of Labor will investigate incidents involving serious injury or death and will continue some operations with minimal staff.

Employee Hiring: The E-Verify system of the Department of Homeland Security has been shutdown, which means employers will be unable to process I-9 work authorizations for the time being. You can submit late verifications when DHS resumes full operations.

6. Environmental Law:  The Environmental Protection Agency has mostly gone dark, though a few EPA projects that are not government-funded, and some considered emergency activities, will continue operating.

7. Intellectual Property: The U.S. Copyright Office, as well as its Public Information Office and Tech Support services, are closed. It's still possible to file a Copyright Application, but clients won't get results until the staff comes back to work.

The United States Patent and Trademark Office is open, and will remain open for about four weeks. The PTO will shut down when they run out of reserve funds, and continue to run with minimal staff.

It's not all bad news.

The U.S. Postal Service is considered a private company, so you'll still be able to send and receive mail. The Social Security Administration will continue to send checks, and NASA will continue to keep the  lights on in their control rooms for our astronauts aboard the International Space Station.

But for those of us doing business on a day-to-day basis, we can only hope this shutdown won't last for very long.

 

Tal Grinblat is a Franchise & Trademark Lawyer, and Stephen T. Holzer is an Environmental & Business Litigation Attorney. Contact either of them via email: tgrinblat@lewitthackman.com, or sholzer@lewitthackman.com.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Wednesday
Nov212012

2013 California Tenant Law - Landlord Obligations Upon Foreclosure (AB 2610)

Corporate Litigation Lawyer Los AngelesBusiness Litigation  

 

Paul C. Bauducco
818.907.3245

 

Governor Jerry Brown signed Assembly Bill 2610 in September, a California landlord tenant law which gives current renters more time to stay at a property when a landlord is undergoing foreclosure.

The new law will bring the state more in line with federal law regarding protecting tenants on foreclosed properties. (Senate Bill 1191 is the bill we discussed in my last blog, Responsibilities of Landlord in Default and Foreclosure, which addresses notices to prospective tenants. You may also want to read Seven New Laws in Effect January 1st, for an overview of other legislative changes affecting California property owners and managers.)

AB 2610 amends the Civil Code (section 2924.8) and the Code of Civil Procedure (sections 415.46 and 1161b). When a Notice of Sale is posted on a property, the new owner must post a notice in the same manner which informs tenants of protections available to them.

Landlords must notify tenants that:

1. If they are month to month tenants, the new owner must give them a new lease or rental agreement, or give them 90 days notice before evicting them.

2. If they have a fixed term lease, the new owner must honor the lease, unless:

a.  The new owner will occupy the property as his/her primary residence. 

b.  The tenant is the mortgagor, or the child, spouse or parent of the mortgagor. 

c.  The lease was not the result of an arms’ length transaction. 

d.  The rent is well below fair market excluding any federal, state or local rent control laws.

Landlord Responsibilities After a Notice of Default

 

While SB 1191 pertains to landlords who provide single-family, or four or fewer units in a multi-family dwelling, AB 2610 is broader, having no limitations on residence size.

The law will become operative on March 1, 2013 and will remain in effect until December 31, 2019.

One more thing:

Existing law permits the buyer of the foreclosure property to use a prejudgment claim of right of possession against a holdover former owner.

Assembly Bill 2610 specifically states that this existing law will not limit the rights of the tenant to also file a prejudgment claim of right of possession before judgment. Moreover, the tenant may also object to enforcement of a judgment for possession whether or not the tenant was served with the claim of right to possession.

 

Paul C. Bauducco is the Chair of the Business Litigation Practice Group at our firm. Contact him via email if you have any questions regarding construction defects, landlord tenant laws or real estate litigation: pbauducco@lewitthackman.com.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Wednesday
Nov072012

California Landlord Tenant Law – Responsibilities of Landlord in Default and Foreclosure (SB 1191)

Corporate Litigation Lawyer Los AngelesBusiness Litigation Paul C. Bauducco
818.907.3245

 

New California landlord tenant laws go into effect in 2013 for rental property owners facing foreclosure.

Senate Bill 1191 was signed into law by Governor Jerry Brown in September, adding Section 2924.85 to the Civil Code. (Read about other new laws for landlords, housing associations, and property managers in last week's blog, Seven New Laws in Effect January 1st.)

 

Notice of Default - California Civil Code Section 2924.85
(Effective January 1, 2013)

 

If you provide single-family homes or multi-family dwellings of four or fewer units for rent and have received a notice of default for a mortgage or deed of trust for the property, you are required to provide written notice – in English and other languages per California Civil Code Section 1632 – of that default to any prospective tenants.

In your notice to a prospective tenant, you must disclose that the property may be sold in foreclosure and that the tenant may, or may not be forced to move in the future.

You should also state that a new landlord or property owner must honor the lease unless the new owner chooses to occupy the property as a primary residence or if there is a "Just Cause for Eviction Law" applicable in your city.

If you are buying a rental property in a foreclosure sale, you'll need to provide the tenants with a 90 day notice of eviction if you plan to evict.

 

Penalties for Violating Section 2924.85

 

Section 2924.85 provides for certain tenant rights in the event a landlord fails to give the required notice, including:

  1. Allowing the tenant to void the lease and recover the greater of one month’s rent or twice the actual damages suffered; or

  2. If a foreclosure has not occurred, allowing the tenant to elect not to terminate the lease, but to deduct an amount due to the landlord equal to one month’s rent.

 

Foreclosure Notice - California Civil Code Section 2924.8
(Effective March 1, 2013)

 

As a property owner, you should direct your managers to deliver written notices of foreclosure to existing tenants in writing.  The exact language for the Notice is set forth in Section 2924.8, including notice that:

  1. Landlord LawForeclosure has begun which may affect the tenant’s right to continue to live in the property.

  2. The property may be sold 20 days or more after the date of the notice.

  3. The new property owner may give the tenant a new lease or provide the tenant with a 90 day eviction notice.

  4. The tenant may have the right to stay in the property longer than 90 days if he/she has a fixed term lease, which the new owner must honor, unless the new owner will occupy the property as a primary residence.

  5. In some cases and in some cities, where there is a “just cause for eviction law”, the tenant may not have to move out.

  6. The tenant may wish to contact a lawyer or legal aid office to discuss his/her rights.

Paul C. Bauducco is a Construction Defect and Real Estate Litigation Attorney at our Firm. He is also the Chair of the Business Litigation Practice Group. Contact him via email: pbauducco@lewitthackman.com.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Wednesday
Oct312012

California Landowners & Managers: 7 New Laws in Effect January 1st

Corporate Litigation Lawyer Los AngelesCommercial Real Estate Litigation  

 

Paul C. Bauducco
818.907.3245

 

Whether you own private or commercial rental property, serve as a member of a housing association, are a California realtor, or just have an interest in buying, selling or leasing property, take note:

With the New Year come new rules regarding your real estate.

Hopefully you are already in compliance with the new laws Governor Jerry Brown signed this past legislative season. If not, there are some important property ownership and management laws you should be ready for on January 1st.

 

2013 Common Interest Development & HOA Laws

 

Assembly Bill 1838 amends the Davis-Stirling Common Interest Development Act,  which regulates common interest developments like apartments, condos, townhouse developments and stock cooperatives.

1.  Cancellation Fees: HOAs won't be able to collect cancellation fees for HOA sales disclosure documents under AB 1838 if the cancellation is requested in writing, and if the work on the order has not yet been fulfilled, or if the HOA has already been compensated for that work.

2.  Davis-Stirling Simplified: The Act has also been reorganized. Assembly Bill 805 (the bill relocates the Act to a different part of CA Civil Code) doesn’t go into effect until January 1, 2014, so HOAs won't have to change governing documents to reflect the move until the end of 2013.

 

New Laws for Landlords & Property Managers

 

If you own or manage apartments, townhouses or space in an RV park, these new California landlord tenant laws apply to you:

3.  Notice of Default: Landlords must disclose written notice of default under any mortgages or deeds of trust on rental properties to any prospective tenants, if renting properties containing one to four residential units, before signing a lease agreement. Under Senate Bill 1191, the tenant may void the lease and recover either one month's rent or twice the amount of damages and all prepaid rent should a landlord fail to provide notice.

4.  Foreclosure Notice: Month-to-month tenants must be given a written 90 Day Notice to Terminate a rental unit when a property is foreclosed. If a tenant still has a fixed-term lease, generally the tenant can remain until the end of the term, under Assembly Bill 2610

5.  Mobile Home Owner Rights: Per Assembly Bill 2150, managers or owners of mobile home parks must provide a specified notice in the rental agreement for space, before February 1st of each year, starting in 2013. The notice sets forth rights and responsibilities of the mobile home owner, including a 90 day notice of a rent increase.

6.  Abandoned Property: When a tenant quits the premises and leaves behind personal property, the landlord must sell the abandoned property at public auction if it is worth $700 (formerly $300) or more, per Assembly Bill 2521.

7.  Animal Control: Landlords who allow tenants to keep pets cannot require tenants to have their pets declawed or devocalized as a condition of occupancy, per SB 1229.

These are just some of the California real estate laws affecting landlord-tenant relations and home owner associations in 2013. Please feel free to contact me if you have any questions regarding real estate or construction law.  A better understanding of the law can prevent problems and litigation.

Paul C. Bauducco is the Chair of our Business Litigation Practice Group. You may reach him via email: pbauducco@lewitthackman.com.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
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