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Eight Signs that Architectural Walls Might be a Great Fit for Your Office

Let’s explore architectural walls. Architectural walls create spaces that you need for today and tomorrow. The open transparent space attracts high achievers, while the huddle rooms offer privacy for meetings and phone conversations. Suppose your business is at a turning point. Your past success has you eyeing the next step. Growth is right in front of you, if only you could scale to meet the demand.

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You know your office work environment needs to morph, change, and grow to help you meet these challenges, but how? Walk around your office and observe your teams working… what do you notice?

  • The last couple “A” candidates chose a competitor
  • Your café/lunch area is only used for eating
  • Your open floorplan has your team taking phone calls in their cars
  • Your company works in project teams… with no place to huddle
  • You are afraid to make changes because your industry is changing faster than you can predict
  • Your large conference room is rarely used
  • Your teams want to be sustainable, but you are not quite there
  • You want to refresh your space, but you don’t have time for construction.

Architectural walls create spaces that you need for today and tomorrow. The open transparent space attracts high achievers, while the huddle rooms offer privacy for meetings and phone conversations. Demountable wall options make it easy to reconfigure for future needs. Glass walls let light in and are a sustainable way to help meet LEED building parameters. Premanufactured walls are ready to install without the dirt, mess, and disruption of typical construction. Architectural walls can help you achieve the growth you have always dreamed of. Google, Amazon, and most industry leaders use architectural walls to attract and retain top talent and to prepare themselves for the constant rhythm of business change.


Bob Batley is the Vice President of Architectural Products at COFCO, a mid‐Atlantic regional commercial furniture and walls solution provider. With over 35 years of executive leadership in the hospitality, commercial construction, and work environment fields, Bob consults, speaks, and is a thought leader when it comes to the challenges of today’s fierce competitive work environments. Bob can be reached at BBatley@cofcogroup.com or follow him on LinkedIn, Twitter, and Instagram.

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(COVID-19 Update) Implications for Landlord-Tenant Relationships

COVID-19 Implications for Landlords and TenantsIn light of COVID-19 and the evolving climate resulting therefrom, Commercial and Residential Landlords are being presented with difficult decisions necessitating quick response. Everyone agrees health and safety is the priority; however, both landlords and tenants are asking what their rights and obligations are as a result of this pandemic. We’ve heard the term force majeure used over the past week as it relates to enforcement of contracts, leaving both landlords and tenants wondering if COVID-19 is a force majeure event that reduces or even eliminates their respective rights and obligations under the lease.

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Force majeure clauses are found primarily in non-residential leases and only occasionally in residential leases. Generally speaking, force majeure clauses excuse a party from certain contractual obligations when an unforeseen circumstance or event outside of their control makes performance impossible. Force majeure clauses attempt to provide the parties with certainty if/when an unforeseeable unknown event occurs. Many force majeure clauses specifically define the triggering events while others vaguely refer to unforeseeable events or are silent.

At present, there is uncertainty as to whether COVID-19 is an event if force majeure; however, actions taken by the state and local officials to shut down businesses and encourage or mandate shelter-at-home protocols arguably trigger the effect of typical force majeure clauses, especially if health-related disasters, like disease or pandemic, are called out specifically.

As a first step in determining if COVID-19 is a triggering event, the landlord and tenant must review the express terms of the lease to determine if a force majeure clause appears. Next, the parties must determine the scope and language of the clause — does it specifically include or exclude health-related events or is it silent on that issue? Of course, if there is no such clause at all, a different analysis must be made.

Assume a clause exists and would be triggered by the current pandemic. In its simplest form, the express terms of a force majeure clauses in residential and commercial leases will dictate the parties’ rights and obligations. Further depending upon the circumstances and the level of specificity of the meaning or definition of “force majeure” as used in an express clause within a lease, principles of equity may be invoked. Simply because a force majeure clause appears in the lease which seems applicable does not necessarily mean either party is excused from its lease obligations.

Courts may choose to exercise their equitable powers in determining whether this pandemic implicates a force majeure clause containing or impliedly containing an “act of God” clause which, once invoked, creates an impossibility of performance, a determination that performance is unreasonable, that the contract is voidable

The foregoing information was furnished to us by sources which we deem to be reliable, but no warranty or representation is made as to the accuracy thereof. Subject to correction of errors, due to frustration of purpose, etc. Courts focus on the foreseeability of the event and the connection between the event and the non-performance. An otherwise-defaulting party will have difficulty invoking the force majeure to excuse its contractual obligations. In short, with respect to COVID-19, an interpretation of a force majeure clause must be made to determine whether the party seeking to be excused is simply attempting to use the force majeure to get out of a contract that party no longer wishes to perform.

For leases without force majeure clauses, common law doctrines of impossibility, impracticability and/or frustration of purpose may still apply to excuse contractual obligations. Simple economic struggle will not be a triggering event; however, economic struggle resulting from unforeseeable events may be sufficient.

On March 18, 2020, the Pennsylvania Supreme Court ordered a temporary moratorium on residential nonpayment evictions in the Commonwealth until April 3, 2020. The Order specifies this moratorium was enacted because of the economic impact COVID-19 is having on residents. At present, neither the Court’s Order nor the Landlord-Tenant Act excuses tenants from their rental obligations; however, it is more than likely that this Order will be updated and revised as the pandemic spreads.

Although the Order does not provide for any current rental abatement, if a Landlord is unable to provide tenants with the full intended benefit of the Lease, the monthly Rent should be appropriately adjusted. Congress is also considering relief for the housing providers in addition to renter assistance. Housing providers are experiencing the same health, safety and economic concerns as renters, such as an inability to pay their mortgage, employee payroll and benefits, insurance premiums and tax obligations in the current environment. Congress has been asked to provide much needed relief to both landlords and tenants in the midst of this pandemic; therefore, subsequent updates on this topic are likely.

Force Majeure clauses are typically only enforced as expressly agreed by the parties, but the pandemic may continue to affect this general statement. Since the PA Supreme Court is already entering equitable orders related to residential nonpayment of rent evictions at the beginnings of the pandemic, it is safe to say the Order will be updated and further extended as the pandemic evolves, possibly even affirmatively ordering a rent holiday, partial or full abatement or deferrals.

Many Pennsylvania businesses have been ordered to cease operations as they are not classified as life sustaining; therefore, commercial landlords and tenants are faced with additional concerns. The current list of business deemed to be life-sustaining is listed here.

Commercial leases are controlled by contract law in Pennsylvania; consequently, the express terms of the lease will provide the primary source of guidance. While landlords should retain an open dialogue with tenants, they must also be careful to not promise accommodations they are not able or willing to provide.

We expect landlords to be empathetic during this pandemic, but we do not believe landlords have a unilateral obligation to “foot the bill” for these problems they did not create. Further, if landlords and tenants have any verbal communications regarding rent accommodations, landlords and their agents must be extremely careful to specify that the parties will not be bound by the negotiations and will only be bound when a subsequent agreement is reduced to written form and signed by all parties. Force majeure clauses may be applicable to COVID-19 because of the governmental and court orders forcing closure beyond the control of the landlord or tenant; therefore, landlords must carefully comply with any notice or other procedural requirements set forth in the applicable lease.

Tenants will likely attempt to use a force majeure clause, assuming one to exist in the lease, or seek equitable relief, to excuse their rental obligations; however, most commercial leases preclude the use of force majeure clauses to abate rent and/or terminate the lease even if the tenant is unable to access the leased premises and operate. The terms of each lease and the local jurisdiction’s administrative Orders will affect this. Moreover, if the tenant does not actually vacate the leased premises, Courts will also have to take into account whether it is equitable on either a short-term or long-term basis for the landlord to continue to provide shelter and to incur costs without any compensation, notwithstanding the current prohibition on residential evictions for non-payment.

Mandated closures, like those resulting from Governor Wolf’s recent Order, may require landlords to shut their facilities, which prevents tenants from accessing their premises, making performance impossible whether or not there is a force majeure clause. In cases where the lease does not expressly include a force majeure clause, the concept of impossibility of performance may further provide some protection to landlords as well as tenants.

Force majeure clauses in most commercial leases preclude commercial tenants from withholding rent following an “act of god.” It is inevitable that a commercial tenant will seek rental abatement/deferrals/rent holiday if it is unable to occupy and operate. While the applicable lease may not require the landlord to engage in negotiations, it may be in the commercial landlord’s best interest to get creative and provide short-term relief to struggling tenants rather than suffer the alternative of losing tenants for the long-term and incurring substantial litigation expenses attempting to enforce the lease as written to compel occupancy and/or collect rent. Creative options for negotiations include but are not limited to, temporary rent reductions, payment of percentage rent only (if a retail store remains open; note, however, that the retail stores which do remain open are often grocery stores, which one would expect will be doing substantial business and should not have a problem paying rent), CAM-only monthly payments, application of security deposit to unpaid rent, rent deferrals, temporary rent forgiveness, lengthening the lease term by a time equivalent to the rent deferral period or requiring personal guarantees of future rent payment.

Because nearly everything about COVID-19 remains uncertain and consistently evolving, neither landlords nor tenant should make an assumption that COVID-19 will be declared an event of force majeure. It is of the utmost importance for landlords and tenant to comply with any and all force majeure provisions in the lease, including but not limited to the notice provisions, which may be critical to protecting their respective rights once this pandemic ends. Understanding the rights and obligations of your lease is key to long-term success.

Further, all commercial landlords need to consult their insurance advisors and review the specific terms of their policies, including but not limited to business interruption insurance and rent loss insurance as implicated by this pandemic. Landlords should also recommend that each tenant consult with its insurers regarding the same. Certain states are considering passing legislation expressly prohibiting insurers from denying claims relating to the pandemic, but that hasn’t occurred yet.

We urge all landlords, both nonresidential and residential, to assure that there is a pandemic plan and potentially engage counsel to review all leases for the following purposes: creating an addendum applicable to all tenants in the event of default; review of all force majeure clauses and updating them to include diseases, epidemics, and/or quarantines; review any other applicable contracts with tenants, residents, and suppliers to ensure they understand their rights in the instance of a force majeure.

Many landlords are current experiencing vacant retail centers, malls and buildings. One may think your job gets easier because there are few (or no) tenants in your building, but nothing could be further from the truth. In fact, even if your building is completely vacant for now, there is still plenty of work that needs to be done.

Please make sure that your team considers the following:

• Make sure your HVAC system is running properly.
• It’s ok to reduce regular thermostat settings (perhaps 55 degrees for heating and 80 degrees for cooling), but don’t turn off completely – just don’t turn them off completely!
• Make sure your outside air and exhaust fans are running to keep the air circulating.
• Make sure someone if putting water in the “p-traps” – particularly in sinks and floor drains – to keep sewer gases from backing up into the space.
• Make sure someone from your team is walking every inch of the building every workday.
• He/she should be looking for potential issues – like leaks, unsecured doors, equipment left running, etc.
• Make sure exterior doors and, where operable, exterior windows are locked.
• Work with your tenants to shut off equipment that is not in use. Remember that equipment (like a copier) is still drawing power even when it is in the power-saving mode.
• Water that is sitting still in the plumbing system will develop biofilms – which can cause disease (including Legionella, pseudomonas, and mycobacterium).
• Make sure someone is running the water through the system every day.
• Consider working with an industrial hygienist to test the potable water before letting tenants back into the building. The very last thing you want – after going through COVID19 – is to have an outbreak of Legionella when the tenants return!
• Consider posting a sign with your contact information on exterior doors in case someone needs access to the building.
• If the building is truly vacant, consider posting security guards on-site to deter vandalism and theft. Or, consider installing remote access cameras so you can keep an eye on common areas and the exterior.
• Make sure the roof access is secured – to keep people from accessing the roof and from accessing the building from the roof.
• Consider closing the miniblinds – or at least putting them down and angling them to minimize solar gain (which will reduce energy consumption).
• Review your insurance policy and notify your insurance provider. Even if the closure is only temporary, there might be insurance requirements to consider.
• Make sure building systems (pumps, motors, elevators, etc.) are exercised/run on a schedule. When these pieces of equipment sit idle, they can degrade quickly.

We suggest that you and your teams, colleagues and tenants sign up to receive up-to-the-minute text alerts from the city communications system by texting the word COVIDPHL to 888-777.

Finally, the CDC (Center for Disease Control & Prevention) has provided advice and guidelines for Landlords in the pandemic, specifically that Landlords keep Tenants informed on best practices.

If you have any questions, please contact Kierstin Lange at kmlange@zarwin.com from Zarwin Baum Devito Kaplan Schaer & Toddy PC.

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(COVID-19 Update) Congress Agrees to $2 Trillion Coronavirus Relief Package

$2 Trillion Coronavirus Relief PackageOn Wednesday, March 25, 2020—after days of debate—Congress agreed to a $2 trillion economic relief package designed to provide financial assistance to Americans and their families, and billions of dollars in loans for businesses. Voting is expected midday. The package is the largest fiscal stimulus in modern U.S. history and is the government’s most recent response to coronavirus disease 2019 (COVID-19).

What is included in the stimulus package?

While the final bill has yet to be released, there have been some publicly debated points. The economic rescue package includes a plan to provide two waves of direct financial assistance to Americans, a plan to stabilize the airline industry, a plan to provide small businesses with funds and a plan to issue loan guarantees to other hard-hit sectors in the economy. The package also includes provisions to extend unemployment insurance, increase funding for Medicaid and add additional assistance for small businesses throughout the country.

“This is not a moment of celebration, but one of necessity.”
Sen. Chuck Schumer

Direct Financial Assistance to Americans

The stimulus package would provide two waves of direct payments to all Americans, coming weeks apart. American adults making up to $75,000 would receive $1,200 each and $500 per child. Married couples earning up to $150,000 would receive $2,400. Adults making more than $75,000 but less than $99,000 would receive less, and adults making more than $99,000 would not receive any government financial assistance.

Stabilizing the Economy

The economic relief package proposal includes the following funds to stabilize various sectors of the economy:

  • Airline industry: $50 billion
  • Small businesses lending program: $350 billion
  • Hospitals: $130 billion
  • State and local governments: $150 billion

What’s next?

The economic relief package has been agreed to by Congress, but not yet passed. We will continue to monitor the situation for developments and provide updates.

– by Hardenberg Insurance Group

 

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SBA Disaster Loan Program

The Small Business Administration (SBA) is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.

•       Any such Economic Injury Disaster Loan assistance declaration issued by the SBA makes loans available to small businesses and private, non-profit organizations in designated areas of a state or territory to help alleviate economic injury caused by the Coronavirus (COVID-19).
•       SBA’s Office of Disaster Assistance will coordinate with the state’s or territory’s Governor to submit the request for Economic Injury Disaster Loan assistance.
•       Once a declaration is made for designated areas within a state, the information on the application process for Economic Injury Disaster Loan assistance will be made available to all affected communities.
•       SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
•       These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%.
•       SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
•       SBA’s Economic Injury Disaster Loans are just one piece of the expanded focus of the federal government’s coordinated response, and the SBA is strongly committed to providing the most effective and customer-focused response possible.

For additional information, please visit: https://www.sba.gov/page/guidance-businesses-employers-plan-respond-coronavirus-disease-2019-covid-19, contact the SBA disaster assistance customer service center, call 1-800-659-2955 (TTY: 1-800-877-8339)
or e-mail disastercustomerservice@sba.gov.

Once you go on the website you will click on economic disaster program and that is where you will apply.

For more information about The SBA Disaster Loan Program or about other commercial real estate questions, please contact WCRE, the premier Pennsylvania and New Jersey commercial real estate brokerage firm.

About Us

Wolf Commercial Real Estate is a Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate services, marketing commercial offices, medical properties, investment properties, industrial properties, land parcels and retail buildings for buyers, tenants, investors and sellers in the Greater Philadelphia area and beyond. Please visit our websites for information about our Philadelphia commercial real estate services for office space, retail space, medical space, investments, industrial space or land for sale or lease, or for information about other commercial real estate listings and commercial real estate services from Wolf Commercial Real Estate, the leading Philly commercial real estate broker.

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Cost Segregation Can Increase Cash Flow for Commercial Properties

Cost Segregation Can Increase Cash Flow for Commercial Properties

Let’s look at how cost segregation can increase cash flow for commercial properties. Have you recently built, purchased, expanded or renovated a commercial property? If so, there may be significant untapped tax savings in the property or facilities. A cost segregation study can unlock those savings through greater tax deductions, accelerated depreciation and increased cash flow. Here’s how it works: Portions of a new or existing building are reclassified as “personal property” or “land improvement.” This cost classification can be depreciated over a shorter five, seven or 15 year period as opposed to the standard 39-year depreciable life of a commercial building.

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What if you built, renovated, expanded or purchased a building in prior years? Cost segregation is still an option. The IRS allows taxpayers to change prior accounting methods to take advantage of these previously understated depreciation deductions. This can be done without amending tax returns and can generate a relatively large tax deduction in the year of change.

TAX REFORM MAKES COST SEGREGATION MORE VALUABLE THAN EVER

The tax benefits of cost segregation are even greater thanks to tax reform’s enhancement of bonus depreciation.
In general, bonus depreciation is applicable to depreciable business assets with a recovery period of 20 years
or less. Tax reform doubled bonus depreciation from 50 to 100 percent for qualifying property with acquisition
and in-service dates between September 27, 2017 and December 31, 2022. This means that 100 percent of
qualifying costs would be fully depreciated and recognized in year one and only the remaining building cost
would depreciate going forward over 39 years. After 2022, the bonus rate decreases by 20 percent annually,
so the time to act is now.

REAL RESULTS FOR REAL PROPERTIES

RKL performs over 80 studies every year for companies in a variety of industries, including rental real estate, office buildings, hotels/motels, golf courses, auto dealerships, manufacturing facilities, warehouses and more.

Here are two recent examples to demonstrate cost segregation can increase cash flow.

• Construction of a new hotel facility in 2018: Of the total project cost of $13.5 million, RKL identified $5 million as personal property and land improvements. This cost segregation combined with enhanced 100 percent bonus depreciation a present value of the tax savings of $958,000 (using a 37 percent federal tax rate and six percent discount rate), with projected additional depreciation deductions of $4 million for a tax savings of $1.5 million.

• Turn-key construction of a new medical office in 2017: Of the total project cost of $2.4 million, RKL identified $1 million as personal property and land improvements. This cost segregation combined with enhanced 50 percent bonus depreciation produced a present tax savings of $200,400 (using a 42.67 blended tax rate and six percent discount rate), with projected additional depreciation deductions of $695,000 over the next seven years. This will produce tax savings of $296,500 over that seven-year period with $233,200 in the first year alone.

• 2018 look-back study for a previously purchased office/distribution warehouse facility: RKL identified $326,200 of the original $1.375 million building cost as personal property and land improvements. This resulted in a one-time additional depreciation deduction in the current year’s tax return of $170,700. To obtain an analysis of potential cost segregation tax savings, contact RKL today.

FOR MORE INFORMATION CONTACT:

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Bankruptcy Provisions in Commercial Leases

Bankruptcy Provisions in Commercial LeasesLet’s examine what you need to know about bankruptcy provisions in commercial leases. Each property is unique and every relationship has its own contours that will drive the path of commercial lease negotiations. While a lease cannot account for or predict every potential scenario in the course of a commercial landlord-tenant relationship, landlords can put themselves in a better position to weather a tenant bankruptcy by understanding the bankruptcy landscape, including which provisions will be enforced and which provisions will be ignored by bankruptcy courts.

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Most landlords know that commercial bankruptcy cases generally take one of two forms: chapter 7 or chapter 11. In both types of cases, the automatic stay applies. In both types of cases, the commercial lease can be assumed, assigned or rejected within a finite period of time. A chapter 7 case is a liquidating case, while chapter 11 cases are typically reorganizations.

A tenant filing bankruptcy under chapter 7 will cease doing business. There, the court appoints a chapter 7 trustee to gather and liquidate assets and to distribute the proceeds to creditors. While the debtor tenant in a chapter 7 case is unlikely to continue the lease, the trustee may sell/assign a valuable lease to a third party. Negotiations in a chapter 7 case take place with the chapter 7 trustee, rather than with the debtor tenant.

On the other hand, a tenant filing a chapter 11 bankruptcy generally continues operations as a “debtor-in-possession.” The chapter 11 case typically culminates in a plan of reorganization, through which the debtor will outline its plans to fund payments to creditors, restructure debt and continue operations as the entity emerges from bankruptcy. Often, chapter 11 debtors seek to shed debt by rejecting above-market leases or leveraging the right to assume and reject leases by extracting rent concessions from landlords as a condition to lease assumption. Absent unusual circumstances, the court will not appoint a trustee, thus negotiations take place with the debtor tenant.

While a tenant bankruptcy filing shifts the balance of power to the tenant, defensively drafted leases may allow the landlord to retain some control and negotiating advantage after the filing of a bankruptcy.

7 Bankruptcy Provisions in Commercial Leases

(1) Tenant bankruptcy triggering lease termination
Bankruptcy provisions in commercial leases that would terminate a lease or modify other rights of a bankrupt party upon the filing of a bankruptcy petition are known as ipso facto clauses and are unenforceable under the Bankruptcy Code. Bottom line: Don’t waste your leverage trying to incorporate or keep an ipso facto provision in the lease.

(2) Waiver of the automatic stay.
The filing of a bankruptcy petition automatically triggers a stay of all activities to collect a debt, including efforts to obtain possession of property. To avoid the delay associated with the  imposition of the stay, consider including a provision requiring the tenant to waive the protection of the automatic stay or a waiver of the right to contest a motion by the landlord for relief from the stay. The remedy, if enforced by a court, allows a landlord to obtain relief much sooner than it would otherwise be entitled, particularly because courts are reluctant to grant stay relief in the early days of a bankruptcy case. Bottom line: Whether this provision is worth fighting for depends on your jurisdiction. Not all courts will enforce a pre-petition waiver of the stay, and even if they will, the waiver will generally not be “self-executing”. The blessing of the court is needed. Therefore, to avoid the imposition of sanctions that accompany a violation of the stay (or the voiding of stay-violating activities), landlords with waivers in a lease should consult with counsel on filing the appropriate motion with the bankruptcy court before pursuing eviction or collection activities.

(3) Adequate Assurance Definition.
Under the Bankruptcy Code, in order for a bankrupt tenant to assume a lease, it must provide the landlord adequate assurance that it will meet its future lease obligations. The Bankruptcy Code does not define “adequate assurance”, but the parties can define the concept in the lease to narrow the issues in bankruptcy court litigation. Adequate assurance provisions often require the tenant provide assurances as to (i) the source of future rent, including that any assignee is similarly situated, financially, to the tenant at the time the lease was signed, (ii) the stability of the percentage rent, if applicable; and (iii) non-disruption to the tenant mix in the center or complex. Bottom line: A lease containing specific understandings of ambiguous bankruptcy concepts will carry greater weight with a court interpreting a tenant’s post-petition obligations to its landlord.

(4) Shopping Center Provisions.
While bankruptcy courts do not favor limitations or conditions on the assignability of a lease, shopping center leases receive special treatment and, as a result, shopping center landlords have greater leverage in post-petition assignment negotiations. Therefore, if a property can reasonably be considered a shopping center, including a provision indicating that the property is a shopping center may afford a landlord with additional leverage and protections. Any shopping center lease should require that any assignee of the lease in a bankruptcy adhere to exclusive use (or other use restrictions), co-tenancy and tenant mix requirements. Bottom line: Ensure that any
shopping center lease contains provisions that protect the future viability and maintain the integrity of the shopping center if a tenant lease is assumed and assigned in bankruptcy.

(5) Security.
Cash may be king, but, generally, security deposits become property of the debtor’s estate once a bankruptcy petition is filed, limiting the setoff rights of a landlord and requiring motion practice in the bankruptcy court. A letter of credit, coupled with a lease provision allowing the landlord to draw upon it after default and without notice to the tenant, generally falls outside of “property of the estate” and therefore provides more ready access to cash to a landlord whose tenant has filed for bankruptcy. Bottom line: Securing the tenant’s obligations under the lease by collateral that falls outside the umbrella of “property of the estate” puts the landlord in a better position to recover costs when dealing with a tenant in bankruptcy.

(6) Guarantors.
A corporate parent or affiliate guaranty provides additional security for the tenant’s lease. Frequently, however, that guarantor often files bankruptcy at the same time as the tenant, and the landlord’s claim against the guarantor becomes one of many unsecured claims that will receive cents-on-the-dollar recovery. Personal guaranties from tenant equity holders may provide more protection because of the “skin in the game” and a reluctance of many individuals to file personal bankruptcy. Bottom line: The newer the business or the more limited financial history of your tenant, the more compelling a case for obtaining personal guaranties.

(7) Forecasting Trouble.
Bankruptcy provisions in commercial leases that require the submission periodic financial statements, balance sheets and cash flow statements from a tenant and any guarantors will allow a landlord to monitor the performance of its tenant. Leases containing financial covenants provide a mechanism for a landlord to call a default if financial performance declines. Having a heads-up to financial distress can allow the landlord to exercise remedies quickly and potentially in advance of any bankruptcy filing. The automatic stay does not apply to leases terminated pre-petition, so moving quickly to terminate in a distressed situation may give the landlord a valuable edge in regaining possession of the property outside of the bankruptcy court. Bottom line: The more you know about your tenant’s finances, the better you can react to a deteriorating situation, whether by exercising remedies or bolstering the security for the tenant’s obligations under the lease.

The contents of this article are for informational purposes only and none of these materials is offered, nor should be construed, as legal advice or a legal opinion based on any specific facts or circumstances.

Have questions about about bankruptcy provisions in commercial leases?

 

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Commercial Real Estate Tax Deduction Restrictions

commercial real estate tax deduction restrictions.It’s 2020! Let’s take a quick look at some recent tax law changes affecting commercial real estate tax deduction restrictions. Below please find some insight into recent tax changes affecting commercial real estate tax deductions.

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Here are some items that come to mind:

(1) The Tax Cuts and Jobs Act enables investment real estate owners to still defer capital gains taxes using section 1031 like-kind exchanges. There were no new restrictions on 1031 exchanges of real property made in the law. However, the new law repeals 1031 exchanges for all other types of property that are not real property. This means like-kind exchanges of personal property will no longer be allowed after 2017 for collectibles, franchise rights, heavy equipment and machinery, collectibles, rental vehicles, trucks, etc. The rules apply to real property not generally held for resale (such as lots held by a developer).

(2) The capital gain tax rates stayed the same so a real estate owner selling an investment property can potentially owe up to four different taxes: (1) Deprecation recapture at 25% (2) federal capital gain taxed at either 20% or 15% depending on taxable income (3) 3.8% net investment income tax (“NIIT”) when applicable and (4) the applicable state and local tax rate.

(3) The tax law creates a new tax deduction of 20% for pass-through businesses. This gets tricky but here goes. For tax years 2018-2025, an individual generally may deduct 20% of qualified business income from a partnership, S corporation, or sole proprietorship. The 20% deduction is not allowed in computing Adjusted Gross Income (AGI), but is allowed as a deduction reducing taxable income. 

Restrictions on Tax Deductions

(1) Mostly, the deduction cannot exceed 50% of your share of the W-2 wages paid by the business. The limitation
can be computed as 25% of your share of the W-2 wages paid by the business, plus 2.5% of the unadjusted basis
(the original purchase price) of property used in the production of income.

(2) The W-2 limitations do not apply if you earn less than $157,500 (if single; $315,000 if married filing jointly).

(3) Certain personal service businesses are not eligible for the deduction, unless their taxable income is less than
$157,500 for singles and $315,000 if married. A “specified service trade or business” means any trade or business involving the performance of services in the fields of health, law, consulting, athletics, financial services, brokerage services, or any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees or owners, or which involves the performance of services that consist of investing and investment management trading, or dealing in securities, partnership interests, or commodities. (It appears President Trump liked real estate people but did not like professionals like lawyers, doctors, accountants and other consultants).

(4) The exception to the W-2 limit and the general disallowance of the deduction to personal service businesses is phased out over a range of $50,000 of income for single taxpayers and $100,000 for married taxpayers filing
jointly. By the time income for a single taxpayer reaches $207,500 or $415,000 for a married-filing-jointly
taxpayer, the W-2 limitation will apply in full (i.e. personal service professionals get no deduction).

(5) The new tax law increased the maximum amount a taxpayer may expense under Section. 179 to $1,000,000 and increased the phaseout threshold to $2,500,000. Interestingly, the new law also expanded the definition of Section. 179 properties to include certain depreciable tangible personal property used predominantly to furnish lodging. It also expanded the definition of qualified real property eligible for Section 179 expensing to include the following improvements to nonresidential real property: roofs; heating, ventilation, and air-conditioning property; fire protection and alarm systems; and security systems

(6) State and local taxes paid regarding carrying on a trade or business, or in an activity related to the production of income, continue to remain deductible. A rental property owner can deduct property taxes associated with a business asset, such as any rental properties. Don’t confuse such with the itemized deduction for your personal residence or vacation home which is now limited.

(7) While the prior law generally allows a deduction for business interest expenses, the new tax act limits that deduction to the business interest income plus 30% of adjusted taxable income. However, taxpayers (other than tax shelters) with average annual gross receipts for the prior three years of $25 million or less are exempt from this limitation. Real estate businesses can elect out of the business interest deduction limitation, but at the cost of longer depreciation recovery periods—30 years for residential real property and 40 years for nonresidential real property. If a real estate business does not elect out of the interest deduction limitation, then residential and nonresidential real property depreciation recovery periods are maintained at 27.5 years and 39 years, respectively.

Phew-there you have taste of what we’re going or at least as we see general changes directly or even indirectly
affecting real estate peeps. As you can see, the new law will bring a lot of changes (both good and bad) to individual and business taxpayers. On the plus side, this means more planning opportunities for many although looking for answers can be problematic as we all try to navigate through uncertain territory. These comments only touch the surface of one of the biggest tax overhauls in the nation’s history. Stay tuned and do stay close to your tax attorney and accountant.….

 

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Storm Drain Inlet Repair

Let’s look at the importance of Storm Drain Inlet Repair. Inlets, also known as catch basins or storm drains, are designed to collect water runoff from roads and parking lots during inclement weather. The main function of the inlets is to act as an underground drainage system.

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Throughout the drainage process, debris and other waste can accumulate over time, getting caught in the inlets and creating an obstruction. When this occurs, it will slow down the drainage process and can eventually stop it altogether, causing unsafe conditions. Maintaining your inlets by removing the debris will help extend the life of the inlet and surrounding asphalt.

Storm Drain Inlet Repair

The interior of an inlet is typically comprised of bricks and blocks held in place by mortar, or a precast concrete structure. During freeze-thaw cycles, and as a result of salting parking lots in the snow, the interior can erode and cause the frame and grate to sink. As a result, sinkholes are common as the surrounding asphalt deteriorates.

Always consult a licensed professional like American Asphalt Company to inspect your inlets in order to determine the severity of any potential problems. Once the issue is diagnosed, we will make sure that the inlet and the surrounding asphalt is fixed the RIGHT way. It is important to always look for the signs, first starting with the debris and make sure that they are removed.

Having the water drain properly off of your parking lot is vital and can prevent safety issues and possible liabilities.

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WCRE FOURTH QUARTER 2019 REPORT

YEAR ENDS ON A HIGH NOTE IN SOUTHERN NEW JERSEY & PHILLY CRE MARKETS

Favorable Economic Conditions Expected to Continue into 2020

Commercial real estate brokerage WCRE reported in its analysis of the fourth quarter of 2019 that the Southern New Jersey and Southeastern Pennsylvania markets continued their years-long overall steady performance. Sales volume and prospecting activity held steady, and although leasing activity was down, vacancy rates remain low across the region for all property types. Gross leasing absorption was positive but trending lower quarter over quarter.

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“CRE performance was good by almost every measure as the year wound down,” said Jason Wolf, founder and managing principal of WCRE. “It seems like when one sector or part of the region underperforms, the rest of the market keeps moving in the right direction.”

There were approximately 204,077 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was down compared to the previous quarter. But the sales market stayed active, with about 1.5 million square feet on the market or under agreement. Completed sales more than doubled from the previous quarter, at approximately 781,130 square feet trading hands.

New leasing activity accounted for approximately 65 percent of all deals for the three counties surveyed. Overall, gross leasing absorption for the fourth quarter was in the range 85,000 square feet, up about 20 percent over the third quarter.

Other office market highlights from the report:

● Overall vacancy in the market is now approximately 12 percent, which is up half a point from the previous quarter. This is still near a 20-year low.

● Average rents for Class A & B product continue to show strong support in the range of $10.00-$15.00/sf NNN or $20.00-$25.00/sf gross for the deals completed during the quarter. These averages have hovered near this range for more than a year.

● Vacancy in Camden County rose to 12 percent for the quarter, due in part to the return of a few large blocks of space to the market.

● Burlington County’s vacancy also stood at 12 percent. Burlington’s vacancy rate also jumped earlier in the year due to several large blocks of space returning to the market.

WCRE has expanded into southeastern Pennsylvania, and the firm’s quarterly reports now include a section on transactions, rates, and news from Philadelphia and the suburbs. Highlights from the fourth quarter in Pennsylvania include:

● The vacancy rate in Philadelphia’s office market rose slightly to 8.7 percent. The office vacancy rate is still near a 20-year low, and below that of comparable major cities.

● The industrial sector in Philadelphia remains very strong. Q4 saw vacancy rates at 5.4 percent, while net absorption was at 5.4 million SF. Rent growth of 4.8 percent has far exceeded the longterm average of 1.7 percent.

● Philadelphia retail is so far avoiding a major spike in vacancy due to the shift toward e-commerce. Rising wages and low unemployment are fueling retail spending, buoying the CRE market. The vacancy rate inched up to 4.8 percent, while net absorption was negative 98,300 square feet over the last twelve months. This represents a positive swing of more than 450,00 SF for Q4.

WCRE also reports on the Southern New Jersey retail market. Highlights from the retail section of the report include:

● Retail vacancy in Camden County fell to 6 percent from 6.9 percent in Q3. While average rents stayed in the range of $17.00/sf NNN.

● Retail vacancy in Burlington County ticked up very slightly, to 7.7 percent, with average rents in the range of $12.52/sf NNN.

● Retail vacancy in Gloucester County jumped to 11.7 from 7.4 percent, with average rents in the range of $13.27/sf NNN.

The full report is available upon request.

About WCRE

WCRE is a full-service commercial real estate brokerage and advisory firm specializing in office, retail, medical, industrial and investment properties in Southern New Jersey and the Philadelphia region. We provide a complete range of real estate services to commercial property owners, companies, banks, commercial loan servicers, and investors seeking the highest quality of service, proven expertise, and a total commitment to client-focused relationships. Through our intensive focus on our clients’ business goals, our commitment to the community, and our highly personal approach to client service, WCRE is creating a new culture and a higher standard. We go well beyond helping with property transactions and serve as a strategic partner invested in your long term growth and success.

Learn more about WCRE online at www.wolfcre.com, on Twitter & Instagram @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC. Visit our blog pages at www.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, www.southjerseyretailspace.com, www.phillyofficespace.com, www.phillyindustrialspace.com, www.phillymedicalspace.com and www.phillyretailspace.com.

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Remedies for Purchase and Sale Agreement Breaches

Let’s look at remedies for purchase agreement breaches and sale agreement breaches. What happens when a commercial contract buyer fails to purchase the property as required by the purchase and sale agreement (PSA) or otherwise commits a material breach?

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Seller Remedies for Buyer’s Agreement Breaches

purchase agreement breaches and sale agreement breachesHere are specific remedy provisions to consider in the PSA, other than all “rights and remedies available at law or in equity”:

1. Liquidated Damages. The typical seller remedy for buyer agreement breaches is retention of the deposit monies posted at the time of signing the PSA. This is another reason for both seller and buyer to carefully consider the amount of the deposit when finalizing the agreement of sale, as this is not just an expression of buyer’s financial capability, but also the amount the buyer may forfeit to seller if it fails to close, after any contingency periods have expired. In NJ, liquidated damages provisions or stipulated damages provisions will be enforced so long as they are a reasonable estimate of the actual damages and not an impermissible penalty. Where the agreed upon amount is unconscionable, a court may refuse to enforce this remedy.

2. Specific Performance. An atypical remedy for a breach agreement breaches in favor of a seller is a court ordering that the purchaser buy the subject property. It is rare that a court will find that money damages are an inadequate remedy or that there are other equitable considerations, and therefore, the buyer must purchase the property.

3. Preserve Indemnity Obligations. While the liquidated damages provision is likely the exclusive remedy, a seller may also carve-out the buyer’s continuing obligation to indemnify seller for any damage caused by buyer or its representative in connection with buyer’s examination of the property. Given that the buyer entity may be a ne wly formed (and empty) special purpose entity (SPE), seller should confirm that buyer and its representatives have insurance in place to protect seller for personal and property damage. And, if the agreement of sale is assigned to a new SPE, seller should ensure that the original purchaser remains liable under the PSA.

4. Delivery of Due Diligence Materials. If buyer breaches the PSA resulting in termination, seller may demand delivery of buyer’s due diligence materials, including items like its title commitment, survey, environmental, property condition and zoning reports and any approvals, at no cost to seller. Buyer will want to be reimbursed the actual cost for these materials. A distinction should be drawn between delivery of the materials following a buyer breach versus following a termination under the due diligence contingency. An argument may be made that following a breach, seller should not have to reimburse the buyer for these costs.

A quick note about time being of the essence. While most South Jersey contracts contain a provision making time “of the essence” thereby setting a specific time frame for establishing a breach, many North Jersey PSAs do not. Where time is not made “of the essence” in the agreement of sale, a party can declare it to be so by delivering a written notice to the defaulting party after the date set for closing has passed. Following the failure to close, a written notice may be delivered demanding a new closing date, provided that it is reasonable in relation to the time that has passed. It should be no shorter than 10 days following the notice. The party ready, willing and able to close, will send this notice to the other to clarify whether there is a breach situation. Additionally, a party may declare time to be of the essence prior to the closing date where the other party has anticipatorily repudiated or breached the PSA. Notices and opportunities to cure may be included in the agreement of sale prior to a particular remedy being available.

Buyer Remedies for Seller’s Agreement Breaches

Seller’s Agreement BreachesSellers are guilty of breaching PSAs too. There are two general categories of seller agreement breaches: failure to close and breach of representations. For failure to close, the two most customary remedies are:

1. Termination, Return of Deposit and Compensation. If the seller does not complete closing, which sometimes happens when it is unable to deliver good title or when it changes its mind — perhaps due to a better offer — buyer is entitled to terminate the PSA and receive a refund of its deposit. Where this right is buyer’s only remedy, and savvy sellers are effective at making it so, the seller essentially has an option contract. If seller elects to breach (eg. to sell the property for a higher pric e or to take the property off the market), buyer may be limited to a termination right and the return of its deposit. In that scenario, buyer is stuck footing the bill for all of its diligence costs, attorneys’ fees and lender costs and expense. Therefore, buyers should seek to be reimbursed for these actual, out of pocket expenses (sometimes capped at a reasonable amount), in addition to the return of the deposit.

2. Specific Performance. If seller fails to close, buyer may be entitled to enforce specific performance against seller, provided that buyer has complied with its PSA obligations and commences the action within a reasonable period of time following the breach, say 45 days. Unlike the seller remedy which is extremely rare, a court is more willing to agree that the property is unique, and therefore buyer cannot be adequately compensated for seller’s breach with money alone. It is easier to convince a court to force the sale of the property to a buyer with “clean hands”, so buyer should make sure it has complied with its PSA obligations.

In anticipation of filing an action for specific performance, and perhaps as leverage in negotiating a settlement, the buyer may file a notice of lis pendens with the county recorder’s office indicating that it has a claim against title to the subject property. Doing so places the world on notice of the claim and essentially prevents sale of the property to another buyer or seller financing of the property. Some sellers will seek to prevent such filings by adding language which prohibits the filing of a lis pendens in the PSA. If specific performance is not available after being elected as a remedy, the PSA may state the buyer is able to recover all of its damages, without limitation.

For breach of a seller representation discovered post-closing the remedies may be based on parameters set for recovery in the PSA. The PSA may include language regarding: (i) a basket or deductible amount by which the damage must exceed for the claim to be actionable; (ii) a cap or maximum seller-liability amount; and (iii) a post-closing survival period for the representations and a period of time within which any claims must be made, which periods may be the same. Sellers will look to insert a high basket amount, a low cap on liability and a very short survival period. The dollar amounts will vary depending on the size of the transaction and the negotiating leverage of the parties. The survival period may vary significantly from PSA to PSA and may also vary within the PSA depending on the specific representation and its importance to the transaction. If the breach is discovered pre-closing and closing occurs, typically, no post-closing remedy will be available. Both buyer and seller should appreciate a prevailing party attorneys’ fees provision, like: “In the event either party employs an attorney in connection with claims by one party against the other arising from the operation of this PSA, the non-prevailing party shall pay the prevailing party all reasonable fees and expenses, including attorneys’ fees, incurred in connection with this transaction and the collection of any judgment.” This can significantly increase costs for a breach.

Conclusion

At the time of PSA negotiation, the parties rarely believe that either side will actually breach their agreement. Nevertheless, sufficient time should be spent considering the “what ifs” should the transaction go south. The parties will want to be clear on the respective remedies so that they can move on quickly following a breach. Since the deposit going to seller will often be the remedy for a buyer’s failure to close, care should be given in determining the amount. If the deposit is disproportionately high compared to the monetary damages the seller will actually suffer in the event of a buyer breach, perhaps only a portion should be delivered to the seller with the balance being returned to buyer. Conversely, if the deposit is too low relative to seller’s anticipated damages, perhaps the seller should receive additional compensation. Remedy provisions should not be considered boilerplate. The parties to a PSA should consult with experienced counsel to understand the rights and remedies, and their many variations, following a breach. The contents of this article are for informational purposes only and none of these materials is offered, nor should be construed, as legal advice or a legal opinion based on any specific facts or circumstances.

 

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Sale and Leaseback of Commercial Real Estate

Sale and Leaseback of Commercial Real EstateLet’s explore the sale and leaseback of commercial real estate. Confer with the professionals at WCRE or ask us for a seasoned real estate or tax attorney but here’s one technique Abo has seen work well with business clients. Although real estate is generally thought of as an illiquid asset, some liquidity can be achieved by taking out a loan backed by the property. Alternatively, a sale and leaseback may be used effectively if a company’s balance sheet is burdened with excessive debt or just having difficulty in obtaining new capital. Typically, the transaction involves the company owned property being sold to a third party and then leased back to the company under a long-term lease.

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Sale and leaseback transactions may be on the rise but clients need to be aware that the IRS often focuses on transactions between closely-held corporations and their controlling shareholder to make sure that these transactions benefit the company as well as the shareholder. In one common type of sale and leaseback transaction, the company sells the land with a building on it to the shareholder and, in turn, the shareholder leases it back to the company. Some of the financial and tax benefits we’ve seen have included:

The rental deductions the company could take might be significantly larger than the former depreciation deductions if the property had been in service for many years.

After the sale and the leaseback transaction, the shareholder’s basis in the property will be its fair market value which is usually greater than the price paid for the property by the corporation. Thus, the shareholder’s depreciation deduction would be much greater than what was previously available to the corporation (also still need to consider the tax consequences of the sale to the corporation).

The sale and leaseback may enable the shareholder to generate passive rental income that could be offset
against passive losses of the shareholder.

The IRS would obviously be concerned that these transactions have economic substance and that they are
based on reasonable market conditions, and not just designed to generate larger tax deductions. Thus, for
a sale to be valid, the controlling shareholder should have taken an equity interest in the property and also
assumed the risk of loss. For the leaseback to be valid, four tests come to mind that really should be met:

1. The useful life of the property should exceed the term of the lease.

2. Repurchase of the property by the corporation at the end of the lease term should be at fair market value and not at a discount.

3. If the leaseback allows for renewal, the rate should be at a fair rental value (speak to WCRE, not necessarily the accountant).

4. The shareholder should have a reasonable expectation that he or she will generate a profit from the sale and leaseback transaction based on the value of the property when it is eventually sold and the rental obtained during the lease term.

I suspect one of the biggest risks for the seller-lessee is the loss of a valuable asset that could have substantially appreciated over its useful life. Also, the rental market could drop, leaving the seller locked into a rental rate in excess of fair value. On the other side of the table, the seller could move or default, leaving the buyer with unattractive real estate in a soft market.

Even if there are no other problems, the benefits of the deal could be substantially reduced if the IRS deems that it is merely a “financial lease.” In that case, the IRS will treat the seller-lessee as the true owner of the real estate, with all the appropriate tax assessed, and the buyer-lessor will be treated as a lender-mortgagee.

Since sale and leaseback transactions can be quite complicated and also have to pass IRS muster, as I stated earlier, whether you are a buyer, seller or investor, you are well advised to consult with WCRE and seasoned real estate/tax counsel about your financial and tax consequences and the manner of structuring and implementing them to withstand possible IRS challenge.

FOR MORE INFORMATION:
Martin H. Abo, CPA/ABV/CVA/CFF is a principle of Abo and Company, LLC and its affiliate, Abo Cipolla Financial Forensics, LLC, Certified Public Accountants – Litigation and Forensic Accountants. With offices in Mount Laurel, NJ and Morrisville, PA, tips like the above can also be accessed by going to the firm’s website at www.aboandcompany.com.

 

Martin H. Abo, CPA/ABV/CVA/CFF
307 Fellowship Road, Suite 202
Mt. Laurel, NJ 08054
(856) 222-4723
marty@aboandcompany.com
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Winter Weather Liabilities

Winter Weather LiabilitiesLet’s explore some winter weather liabilities. The winter months bring more than just cold weather and shorter days; they bring the possibility for winter weather and storms that may result in a snow and ice-covered landscape. While it may be a winter wonderland for some, as a property manager, snow and ice buildup means a hazard with the potential for costly liability.

If you deal with either commercial or residential property, you are responsible for the side effects of winter. In legal terms, snow and ice are the same as any other hazard presented on a property, and just like any other hazard, property managers can be held liable if they cause injury. To avoid litigation resulting from winter injuries, it is important that you are vigilant in your snow and ice removal efforts.

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RECOGNIZING AND PREVENTING HAZARDS

Winter brings a variety of hazards that you need to prepare for; slips and falls are by far the most common injury associated with winter weather conditions. Diligent snow and ice removal can go far in keeping walkways and parking lots safe. Remove snow quickly after snowfalls, and salt regularly to keep ice from building up.

Not all winter hazards are under foot, however, icicles, along with other accumulations of frozen or heavy snow above walkways and building entrances, can cause serious injury if they fall on those below. Remove icicles and other buildup as soon as possible. If it still appears to present a hazard, consider rerouting foot traffic around the area.

Performing preventative maintenance in the summer and fall can also keep you prepared for winter storms. Make sure eaves are properly installed, and check that downspouts are aimed away from walkways. If eaves leak or downspouts direct water onto walkways, snow that melts in the heat of the day has the potential to freeze and create a hazard with cooler nighttime temperatures.

TRANSFERRING RESPONSIBILITIES TO TENANTS

For smaller residential rentals, such as single family homes or duplexes, the responsibility for snow and ice removal is commonly accepted by the tenant. To make sure responsibility is clearly established in this situation, the lease should include a provision citing the tenants as responsible for any snow and ice removal. This section of the lease should also establish how long after a snowfall the tenant has to clear public areas such as sidewalks, as most municipalities have laws requiring prompt snow removal. It is important to be as specific as possible to avoid any unnecessary liability or disputes after heavy storms.

CONTRACTING SNOW REMOVAL

Based on the size and number of properties you manage and the average snowfall in your area, you may be inclined to contract out snow removal to an independent company. While this can save you the time and costs associated with managing snow removal yourself, it is important that you choose wisely to avoid complicating matters.

First, make sure the contractor has sufficient resources to meet your demands. It is important that they can be onsite quickly after, or even during, a snowfall to make sure walkways and parking areas are cleared. It is also important that they have the equipment and manpower to finish the task quickly to reduce any disruption to tenants’ lives or businesses.

Second, make sure the company you hire carries the proper insurance, covering both its operations and its employees. The last thing you want is to end up being liable for a worker’s injury when liability for injury is the very thing you were trying to avoid. Also, much like the lease agreement with a residential tenant, it is important to specify the conditions and time constraints for removal in writing. When contracting any type of service, it is essential to have a written contract that will guarantee you receive the services you pay for.

It should be noted that hiring a removal service does not absolve you of liability. If the company you hire provides poor service, or simple does not show up at all, you are still the party responsible for any injury resulting from a winter hazard. Make sure to pick a reputable company that you can trust to do a good job, and always have a plan of action for removal if they are unable to complete the work as quickly or effectively as you require.

For additional questions on your risks and exposures, or on appropriate coverages to protect you from liability or costly disputes, contact Hardenbergh Insurance Group today.

For more information, contact:

winter-weather-liabilitiesBrian Blaston
Commercial Lines – Manager
Hardenbergh Insurance Group
phone: 856.489.9100 x 139
fax: 856.673.5955
www.hig.net

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