Comments on: What Clause Might Save Grief For The Real Estate Investor? http://bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/?utm_source=rss&utm_medium=rss&utm_campaign=what-clause-might-save-grief-for-the-real-estate-investor Real Estate Investing Through Purposeful Planning Sun, 20 May 2012 02:11:14 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Jeff Brown http://bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2713 Jeff Brown Sun, 06 Jul 2008 18:46:56 +0000 http://www.bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2713 Snakes in the grass -- a well known real estate technical term. :) Dead on, Doug. Snakes in the grass — a well known real estate technical term. :)

Dead on, Doug.

]]> By: Doug Quance http://bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2712 Doug Quance Sun, 06 Jul 2008 18:18:30 +0000 http://www.bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2712 Just another reason why a buyer should use a seasoned pro to assist and represent them. There's simply too many snakes in the grass. Just another reason why a buyer should use a seasoned pro to assist and represent them. There’s simply too many snakes in the grass.

]]> By: BawldGuy http://bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2711 BawldGuy Fri, 04 Jul 2008 04:23:02 +0000 http://www.bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2711 Thanks David! Oh, and Readers? David's the real estate attorney we refer our clients to, and will use ourself as necessary. He is WAY beyond the real deal. Have a great 4th, David. Thanks David!

Oh, and Readers? David’s the real estate attorney we refer our clients to, and will use ourself as necessary. He is WAY beyond the real deal.

Have a great 4th, David.

]]> By: David Stejkowski http://bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2710 David Stejkowski Fri, 04 Jul 2008 04:14:36 +0000 http://www.bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2710 Great post, Jeff. I'll bite and chime in. Estoppel certificates are an absolute MUST in commercial transactions. One of the biggest negotiation items is usually the form, content and number of estoppels the seller has to give the buyer. It can be very complicated, and often the buyer's lender gets involved because they condition the loan on the receipt of estoppels. But there's a MUCH more practical reason to obtain estoppel certificates WHENEVER you can, no matter how large or small the deal. When you get one as a buyer, you are entitled to rely on it against the person giving it! In short, if the tenant says there are no defaults under the lease prior to closing, the tenant is bound by that representation to the buyer (or estopped from asserting something to the contrary), and if the tenant tries to claim otherwise it will lose. And yes, there's plenty case law on this. If you want to read more, Jack Murray (a friend of a friend and someone I respect tremendously) has written a good article on the topic that you can read at http://www.firstam.com/content.cfm?id=2870. BTW, in many cases a subordination, nondisturbance and attornment agreement is just as important as an estoppel. But that's a whole different topic. Suffice it to say for now that an SNDA is this: lender agrees not to kick the tenant out if it forecloses (non-disturb), and the tenant agrees to subordinate its lease to the lender and to pay rent to the lender in a foreclosure (attornment). Whew! I think that's enough for one post. Have a great Fourth! I may even get to play the cannon tomorrow night. Great post, Jeff. I’ll bite and chime in.

Estoppel certificates are an absolute MUST in commercial transactions. One of the biggest negotiation items is usually the form, content and number of estoppels the seller has to give the buyer. It can be very complicated, and often the buyer’s lender gets involved because they condition the loan on the receipt of estoppels.

But there’s a MUCH more practical reason to obtain estoppel certificates WHENEVER you can, no matter how large or small the deal. When you get one as a buyer, you are entitled to rely on it against the person giving it! In short, if the tenant says there are no defaults under the lease prior to closing, the tenant is bound by that representation to the buyer (or estopped from asserting something to the contrary), and if the tenant tries to claim otherwise it will lose.

And yes, there’s plenty case law on this. If you want to read more, Jack Murray (a friend of a friend and someone I respect tremendously) has written a good article on the topic that you can read at http://www.firstam.com/content.cfm?id=2870.

BTW, in many cases a subordination, nondisturbance and attornment agreement is just as important as an estoppel. But that’s a whole different topic. Suffice it to say for now that an SNDA is this: lender agrees not to kick the tenant out if it forecloses (non-disturb), and the tenant agrees to subordinate its lease to the lender and to pay rent to the lender in a foreclosure (attornment).

Whew! I think that’s enough for one post. Have a great Fourth! I may even get to play the cannon tomorrow night.

]]> By: BawldGuy http://bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2709 BawldGuy Fri, 04 Jul 2008 03:41:42 +0000 http://www.bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2709 Thanks for the update. Before ya know it, it'll be spring. You'll feel 20 years younger, and the market might still suck, but not nearly as much. From God's lips to my ears. Thanks for the update. Before ya know it, it’ll be spring. You’ll feel 20 years younger, and the market might still suck, but not nearly as much. From God’s lips to my ears.

]]> By: Robert Coté http://bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2708 Robert Coté Fri, 04 Jul 2008 03:39:05 +0000 http://www.bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2708 Catching up from the previous thread, I am feeling a little better every day. I'm dissatisfied with the pace of improvement but then I tell people I'm 7 weeks from surgery and they don't believe it. No KC bbq for me, I've taken to standing downwind and breathing deeply but things like rubbed King Salmon and breaded wild sole are fine consolation. Only now its carbohydrates I need to additionally subtract. I swear my teeth are buck and ears growing long. Truthfully, I wish the RE investment market would improve as much and also lose as much weight as I have. Thanks for asking. Catching up from the previous thread, I am feeling a little better every day. I’m dissatisfied with the pace of improvement but then I tell people I’m 7 weeks from surgery and they don’t believe it. No KC bbq for me, I’ve taken to standing downwind and breathing deeply but things like rubbed King Salmon and breaded wild sole are fine consolation. Only now its carbohydrates I need to additionally subtract. I swear my teeth are buck and ears growing long. Truthfully, I wish the RE investment market would improve as much and also lose as much weight as I have. Thanks for asking.

]]> By: BawldGuy http://bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2707 BawldGuy Fri, 04 Jul 2008 02:01:55 +0000 http://www.bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2707 They used to be, Chris, but since you left to vacation in the balmy South, they became iffy. They used to be, Chris, but since you left to vacation in the balmy South, they became iffy.

]]> By: Chris Lengquist http://bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2706 Chris Lengquist Fri, 04 Jul 2008 01:58:19 +0000 http://www.bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2706 Estoppel? I know I'm on vacation but this caught my eye. You mean to tell me that a seller is not always truthful? Estoppel? I know I’m on vacation but this caught my eye. You mean to tell me that a seller is not always truthful?

]]> By: BawldGuy http://bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2705 BawldGuy Fri, 04 Jul 2008 01:56:23 +0000 http://www.bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2705 I think you've figured stuff out pretty well. :) Have a stellar 4th. I think you’ve figured stuff out pretty well. :) Have a stellar 4th.

]]> By: Joshua http://bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2704 Joshua Thu, 03 Jul 2008 23:31:06 +0000 http://www.bawldguy.com/what-clause-might-save-grief-for-the-real-estate-investor/#comment-2704 My eyes, ears, and spidey sense are all wide open and that sponge between my ears is just a soak'n away. If I had had (don't you hate when you have to use the same word twice!) a dad growing up this is probably would have side, "It's time to just shut up and listen son. Nuff said." ;) My eyes, ears, and spidey sense are all wide open and that sponge between my ears is just a soak’n away. If I had had (don’t you hate when you have to use the same word twice!) a dad growing up this is probably would have side, “It’s time to just shut up and listen son. Nuff said.” ;)

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