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Annapolis Real Estate Law Blog

Commercial real estate forecast

Commercial real estate industry professionals and investors in Maryland may want to learn about the recent forecast for industry growth that has been issued by the Urban Land Institute Center for Capital Markets and Real Estate. The report, released on April 8, demonstrates that economists believe the commercial real estate market should experience continued growth for the next three years.

For 2015, the commercial property transaction volume is anticipated to rise to $470 billion, which is an 11 percent increase over 2014's figures. The volume is expected to again grow from that level in 2016 and 2017 by an additional 6 percent, with expected revenues of $500 billion in each year. A total of 46 economists were surveyed for the forecast. They all agreed that their will be an increased rental growth due to improved occupancy and vacancy rates in commercial properties.

Why a rate hike is not bad news for the housing market

People interested in Maryland residential real estate transactions may be concerned about a possible interest rate hike by the Federal Reserve, a move that could occur as early as June. While conventional wisdom may lead people to believe that such an increase will be bad for the market, slowing sales and costing people more money due to rising prices, a rate hike may actually be good news.

Contrary to what some have said, the housing market is doing better than many claim. The foreclosure rate continues to decline and is now at a rate of only one out of every 1,295 mortgages. The housing market has surged as well, with sales rising by 24.8 percent between February 2014 and February 2015.

Easement agreements for real estate in Maryland

Maryland property owners or those wanting to purchase a particular piece of real estate sometimes need an easement in order to use the property in a particular manner. In some cases, an easement may be needed in order to simply access property. In others, a person may need an agreement with another person that a certain activity will not be performed on the property.

There are two types of easements that property owners can use. Affirmative easements are agreements to allow certain actions on property. Examples may include an easement granted across another person's land to install a driveway.

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.