After you sell a property, do you want to ensure that the buyer does not make a claim against you? Part 3 of this series discusses the most effective modifications Sellers make to the AIR purchase agreement to avoid (or limit) post-Closing claims by Buyers. “Cap” on Liability: Many custom purchase agreements will include a [...]
Could a quick e-mail from a Buyer’s broker to a Seller’s broker stating “Buyer finds the environmental report unacceptable” accidentally terminate a purchase and sale agreement? Could an e-mail from a tenant's broker to a landlord's broker stating "tenant is going to exercise the option” be an unintentional exercise of an AIR option to extend [...]
The AIR Option To Extend Addendum is frequently an afterthought when completing AIR lease documents. This Addendum is a well-drafted form and relatively straight-forward. Nevertheless, there are at least two key provisions that every real estate professional should know. 1. Fair Market Rental “Floor” Provision: If it is a fair market value option, the Addendum [...]
The AIR leases contain an often overlooked Security Deposit provision. When there is an increase in the Base Rent, the Security Deposit increases proportionately. Therefore, if Base Rent increases by 3%, the Security Deposit also increases by 3%. This landlord-friendly provision is not the standard in custom leases drafted by attorneys. Nevertheless, when lawyers are [...]
In Part 1 of Modifications to the AIR Purchase Agreement, I discussed four areas of the AIR purchase agreement that Sellers frequently modify. Part 2 focuses on perhaps the greatest area of liability to Seller after the Closing – Seller’s 12 representations and warranties that it makes to Buyer. Paragraph 12.1 of the AIR purchase [...]
In a prior article, I addressed the issue of Should You Use the AIR Purchase And Sale Agreement? Some sellers believe that the AIR purchase agreement does not contain protections afforded sellers in custom agreements. It is correct that a custom agreement drafted by a seller’s attorney will typically favor Seller more than the AIR [...]
Generally, yes. The AIR purchase and sale agreement form is well-drafted and does not substantially favor either the buyer or the seller. As a result, it is frequently used for the purchase of real estate in California. There are many advantages to using the AIR purchase and sale agreement. Brokers, lawyers, buyers, and sellers are [...]
According to the various AIR lease forms, Lessor is required to use its “best commercially reasonable efforts” to deliver possession of the Premises on the Commencement Date. If Lessor uses such efforts and is unable to deliver the Premises on time, is Lessor required to compensate Lessee? No, Lessor is not “subject to any liability” [...]
Yes. Even if the Brokers did not participate in the exercise of the AIR Lease Option to extend the term, the Brokers are entitled to a commission. Paragraph 15 of the AIR lease forms state that “if Lessee exercises any Option, . . . Lessor shall pay Brokers a fee in accordance with the fee [...]
Tenants love free rent. But they would hate to pay it back. Under the AIR lease, if Lessee commits a Breach, it is required to immediately pay Lessor the value of any free rent or other inducement (TI allowance, etc.) it received (Paragraph 13.3). This type of provision is included in many custom leases as [...]
