Bernstein & Feldman, P.A.

Providing Personal Counsel
And Representation For Over
30 Years

Annapolis Real Estate Law Blog

University of Maryland leases several properties

A private foundation operated by University of Maryland officials has leased several pieces of commercial real estate in College Park. UMD plans to use the commercial properties, which are valued at over $20 million, to open a string of restaurants, shops and apartments. The university foundation reportedly worked with the city to come up with a plan for the commercial real estate transactions.

Although UMD is ranked relatively highly for its academic offerings, the campus life is often criticized for being nonexistent. Both the campus itself and the city of College Park are said to be seriously lacking in amenities. In fact, many people believe that the absence of businesses in College Park is the reason only 3 percent of the faculty live there, and students rarely stay after they graduate.

Why Maryland businesses rely on commercial leases

Modern firms have unique requirements for the disposition and handling of critical assets, like business properties and other real estate. Companies that operate out of storefronts, warehousing facilities or manufacturing centers may find it necessary to draft customized lease agreements or amendments in order to maintain acceptable revenue streams and avoid litigation. Our commercial leasing firm works hard to prepare businesses for undesirable lease outcomes by providing the representation and consultation they need to try to make effect asset management decisions.

Our legal professionals deliver the benefits of firsthand experience in fields like eviction actions, breach of leases, lease negotiation and tenant noncompliance. We have worked with businesses on both sides of real estate disputes, so we understand how to help you resolve conflicts by pursuing resolutions that work for everyone.

Examining a broker's responsibility to reveal property defects

Maryland residents looking to purchase commercial real estate may be interested in their rights with regard to defects in property. If the real estate broker knew about serious defects in the property, they may be liable for the damages.

When a buyer is looking to enter into a commercial real estate transaction, they may be concerned about defects in the property that cannot be seen without closer inspection. In cases where the real estate agent knows about these defects, they may be required to disclose them prior to the sale. Under Maryland law, any material facts related to the property, whether they are known by the real estate broker or if the broker should have known them, must be disclosed to the buyer.

Commercial real estate investments

There are many different kinds of commercial real estate that can be purchased in Maryland. By definition, commercial real estate is any property that is owned for the purpose of producing income. This means that for investors, commercial real estate could be any type of property including raw land, an apartment complex or an office building.

One type of commercial real estate that can be very profitable for investors are office properties. An office property could be anything from a single-tenant building to a skyscraper. Office properties are grouped into three categories depending on the condition of the buildings and the accessibility of the location. Class A buildings are usually newer buildings in prime locations, Class B buildings are usually in need of a little improvement, and Class C buildings are usually older and inconveniently located.

Maryland commercial real property leases

When a commercial tenant enters into a lease, it could be a gross lease or a net lease. A gross lease means that the rent will encompass all of the expenses related to renting a building. A net lease means that the tenant pays a lower rate of rent, but it will also have to pay certain additional expenses.

A net lease can be in the form of a single, double or triple net lease. In a single net lease, the tenant pays a portion of the property taxes in addition to utilities and janitorial services. In a double net, the tenant pays a portion of the property taxes and insurance. In a triple net lease, the tenant pays for a portion of property taxes, insurance and common area utilities.

Title insurance and real estate disputes

Maryland homeowners or those about to purchase a home may have questions about title insurance. A title gives a purchaser the right to use the property and to own it. Such rights are not inherently granted, and there may be problems associated with the title.

Title insurance covers many but not all possible problems associated with the title. Generally, a title search will uncover problems that may hinder a title but not all. Title insurance is available in two formats, lender's and owner's title insurance. Lender's insurance protects the lending institution from losing money. As the loan is paid, it decreases disproportionately to the owner's risk. In addition, having an owner's policy is important to cover the risk.

Dealing with issues involving construction defects in Maryland

When a new home is built in a defective manner, the homeowner may believe that the contractor who built the home is liable for that defect. There are a variety of allegations that can be made, including that the contractor engaged in negligent behavior, breached a contract between the two parties or acted in a fraudulent manner.

The law states that a contractor must have the proper skills to do the job correctly. Furthermore, the law states that the contractor has a duty of care that extends to anyone who may be damaged, which may include future owners of the home. Contractors are generally responsible for the work of a subcontractor. If the contractor is found to be in breach of contract, the contractor may be subject to the substantial performance doctrine. This may require the buyer to be liable for the contract price of them home less the diminishment in value of the home caused by the defect.

Understanding various types of construction defects

Maryland construction professionals can deal with a variety of challenges in both the design and execution phases of a project. Some defects may manifest even while the project is still underway. Others may take several years to become apparent. The nature of some of these defects can be major, resulting in safety being compromised for those who use the facility in question. Other defects may be more decorative in nature. However, defective work can be inconvenient and costly for the property owner who must address these issues at a later date.

There are four primary categories into which construction defects are placed. These include design issues, material deficiencies, workmanship and subsurface problems. Design issues are typically based on professional errors by engineers or architects who create plans for a structure. These may be tied to building code errors or function problems.

Undisclosed defects when purchasing a home

As Maryland homeowners may know, buying a new house may be a joyous occasion until the buyer is faced with a major defect in the home that was not disclosed. For instance, an undisclosed leak in the roof may be a costly repair and may damage interior wiring and insulation. However, the new homeowner may have recourse to recover damages for a hidden defect.

When selling a house, the owner is responsible for disclosing known major home defects in the property. Disclosure requirements vary from state to state, and some states may include an inspection to assure the new owner that termites are not present. Federal law requires that home sellers disclose the presence of lead-based paint in homes that might be costly and time-consuming to remove as well as a potential health hazard for the new buyers.

Construction disputes and legal issues

Construction projects in Maryland affect many parties, and disputes can crop up for various reasons. Resolution is not always easy, making it important to consider legal assistance as you attempt to work through misunderstandings. Although litigation may be the eventual direction taken as you try to reach that resolution, there may be alternative steps that can minimize court costs and time.

Claims may arise over design and construction activities as a client notes flaws. Structural flaws could lead to serious safety problems, making it important to pinpoint the reasons for such flaws. In some cases, the issues might be fixable. In other cases, your project could be dramatically delayed as corrections are made. Your legal team may need to investigate to identify whether your design team or contractor has been negligent. You may also face issues with delays and costs that exceed your expectations. In such cases, your legal team may need to address the terms of your contract that have not been successfully met.