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Expect Nothing Appreciate Everything

“I’m waiting for …” What? Why? Don’t wait! Do something!

I saw the post below online this morning and it reminded me of one of those “lessons learned.” As a young associate I once started a response to a senior attorney (who wanted an update on the status of an important matter) with “I’m waiting for ….” That’s far as I got! “Why? Why are you waiting? Pick up the phone and call him. Get it done. GO.”

Whoa. My first reaction was “What a jerk!” And, frankly, he was. THEN, however, I realized the reason I was waiting was because I was intimidated at the prospect of calling the attorney on the other side. I was stalling because of my own insecurity. And there was no reason for it! He’d made his point.

Lesson learned: Whenever you find yourself starting a sentence with “I’m waiting for …,” take a second and think about whether you should be waiting for anything at all or whether, instead, you should take control and make something happen! More often than not that is the better choice!


How Do You Define Confidence? Here’s One Way …

ConfidenceSaw this on the internet the other day and it rang true to me. For me, one way of defining confidence as an attorney is being able to respond to a client’s question by admitting, without any shame, “I don’t know … ” but being able to ‘confidently’ add “however, I can get that answer for you.” I recall an instance when, as a young associate at a large firm, I whined to my supervising partner, “You never explain anything to me. I feel like I’m always trying to figure everything out.” He looked at me, perplexed and a little annoyed, and said, “We’re ALL just trying to figure everything out.”

Lesson learned. NOBODY has all the answers.

When hiring an attorney don’t be dissuaded by one who says “I don’t know.” Instead, if he or she has the other characteristics you’re looking for … solid reputation, significant experience, strong work ethic, a personality you’re comfortable with … be encouraged by their willingness to be open and honest and rely on their determination to doggedly pursue the answer. Remember, the “law”, like the “internet”, is a massive thing. Nobody knows it all. BH

Two Words On “Attitude” …

Captain Jack Sparrow, channeling Charles R. Swindoll …

Captain Jack Sparrow - AttitudeThe longer I live, the more I realize the impact of attitude on life. Attitude, to me, is more important than facts. It is more important than the past, than education, than money, than circumstances, than failure, than successes, than what other people think or say or do. It is more important than appearance, giftedness or skill. It will make or break a company … a church … a home. The remarkable thing is we have a choice everyday regarding the attitude we will embrace for that day. We cannot change our past … we cannot change the fact that people will act in a certain way. We cannot change the inevitable. The only thing we can do is play on the one string we have, and that is our attitude. I am convinced that life is 10% what happens to me and 90% of how I react to it. And so it is with you … we are in charge of our Attitudes.  Charles R. Swindoll


showmethemoney-Jerry-Maguire-1I exchanged emails today with another real estate attorney and was amused when I saw this statement as part of her email signature in bold, red letters:

DO NOT DELAY YOUR CLOSING: Due to recent changes in the real estate industry, we can only accept wire transfers. Cashier’s checks do not immediately clear and are not “COLLECTED” funds and will no longer be accepted at closing. Our wiring instructions will be provided.

It’s a bit “in your face” but I understand it. During the real estate “bubble” of a few years ago claims against title insurance underwriters for fraudulent cashier’s checks and other fraudulent activities increased dramatically. That trend continues and, with new technologies, the risk of fraud has become even greater. For example, one M.O. that has been employed, now that checks can be deposited simply by sending a photo of the check to your bank, has been for a person receiving a check at closing to take the check from the closing, deposit it by phone, return and claim that they would actually prefer a wire instead of the check. When the closing agent takes the (now already deposited) check back and then sends the recipient a wire instead, he or she will then have paid twice! The potential scenarios can seem crazy, I know, but with the recent tightening of attorney trust accounting rules and the severe penalties for any discrepancies or errors, we (attorneys) simply can’t take any chances.

ASIDE: Coincidentally, as I was typing this I received an emailed “Fraud Alert” (common these days) from a title underwriter describing a new scheme that has been detected. In this one, the fraudster hacks into a realtor’s or other service provider’s email and directs the closing agent to wire money to the fraudster’s account instead of the person’s whose email they’ve hacked into. Another technique made possible by modern technology! In the alert they recommend that we actually call the recipient to confirm that the email containing their wire instructions was authentic – good grief, one more administrative hassle to deal with at closing!

With regard to cashier’s checks, specifically, many people don’t realize that even cashier’s checks may take a few days to “clear” our trust account and some even get offended if we don’t accept theirs or state that it might cause a delay. However, under no circumstances are we allowed to disburse funds that are not confirmed as being “collected,” that is, confirmed by our bank as being in our account. If you don’t want to risk delaying the closing until we confirm that the funds you are providing are actually “collected,” be prepared to wire the funds. If you absolutely must provide a cashier’s check, be prepared to provide it far enough in advance of closing (i.e. several days) so that the check will clear in time for closing. Personal check? Ummm, not happening.

Thanks for reading! Drop me a note and let me know what you think!


It’s the end of “the closing” as we know it, but it feels fine.

Does it seem as if your life revolves around emails, texts, computers, tablets, the internet, the “cloud” and other electronic forms of communication? Well, the practice of real estate law really isn’t any different and it has changed the way real estate closings are typically conducted. In my commercial real estate practice, it is actually more unusual to have a traditional “sit down” closing, with all parties physically present at the same time, than for the closing to be handled electronically or by “mail away.” While residential closings are still often conducted in the traditional manner, although they are changing also, in my commercial practice it is more often the case that communications between myself and opposing counsel are by phone, email and overnight courier such as Fed Ex or UPS.

Typically, documents are drafted by the closing attorney, transmitted by email for review by the various parties and comments are received back via email or phone. The documents are then finalized and sent out for execution by email or overnight courier, executed and returned by overnight courier. Funds are wired in and wired out. In many cases I never meet opposing counsel or their client face to face and, in fact, I would say that has become the norm in more sophisticated transactions.

Personal checks? Unless you feel like waiting a couple of days until that check clears my trust account, forget it. Attorney trust accounting rules are so strict now that delivery of funds by check, even by certified check, just slows down the process. With my license to practice law riding on it, I’m not disbursing a dime until all funds are confirmed by my bank as being in my trust account and available for disbursement, so don’t try to talk me into cutting any corners!

That being said, I kind of like this new style of closing because, if done right, I think it makes the whole process less stressful for the parties involved. True, it can be impersonal, but it is more systematic, there’s more certainty and there is less opportunity for a last-minute dispute to arise at the closing table. However, it takes a lot of planning, attention to detail and good execution to make this all go smoothly.

To make sure your closing go smoothly, engage an attorney who is willing to put in the work early on to make the day of closing a “non-event.” Documents and closing statements should be prepared and provided for review in advance of the closing date. Comments should be provided and changes to the documents should be made quickly. Money should be wired into the closing attorney’s trust account in advance, perhaps a day or two before the closing date, if possible. If the closing attorney has all the executed documents in-hand and all the funds in his or her trust account no later than the morning of closing, the so-called “closing” becomes as simple as issuing notice to all parties that “we’re closed.” In other words, closing becomes a simple, stress-free non-event. That, in my book, is a successful closing.

An experienced commercial real estate attorney will work with you and guide you through the process in order to make your closing as uneventful as possible!

As always, thanks for reading.


Commercial lull: Orlando builders slow down in October

From Orlando Business Journal – Nov 25, 2013

Central Florida commercial construction values fell in October, but residential values were up significantly.Jim Carchidi

Central Florida commercial construction values fell in October, but residential values were up significantly.

, Senior Staff Writer- Orlando Business Journal

After several strong months, metro Orlando’s commercial construction values were down 32 percent in October when compared to the previous year, according to a new report by McGraw-Hill Construction.

Builders in the Orlando region pulled $29.8 million worth of permits for commercial construction projects last month, down from $43.5 million in October 2012. But homebuilders’ residential construction permits were 68 percent higher last month, from $205.5 million in October 2012 to $344.4 million last month.

In all, total building permit values were up 50 percent last month, from $249.1 million last year to $374.2 million this year.

Increased construction activity signals continued job growth and recovery among construction companies, which make up one of Central Florida’s most dominant industries and are making a comeback from being one of the hardest hit during the Great Recession.

For the first 10 months of this year, residential and commercial permit values hit the $4 billion mark, a 53 percent jump from $2.6 billion in January-October 2012. Commercial construction values were 40 percent higher, from $876.6 million last year to $1.2 billion this year, while residential values grew 60 percent, from $1.7 billion last year to $2.8 billion this year.

Construction values were up 52 percent year-to-date in September.

Here’s some more future construction activity coming down the pike:

Exclusive: Expedia inks lease for Orlando welcome center

3 quick facts about AV Homes’ new Kissimmee project

Exclusive: 10 new projects in Orlando’s construction pipeline

Make sure to read Orlando Business Journal’s Nov. 29-Dec. 5 weekly edition for a closer look.

Due Diligence – Survey Review

In a previous post in this series on “Due Diligence” I explained, generally, the types of physical investigations a buyer of commercial real estate should undertake to learn more about the property he or she is buying. In another, I explained the format and content of a typical title insurance commitment and the basic process of the legal investigation of the legal status of the property, otherwise know as “title review.” An important component of due diligence that combines both an investigation of the physical properties of a site and its legal status is the “survey review.”  I hope that after reading this post you will understand how important the survey review is to the due diligence process.

If I can teach you nothing else about surveys, please learn that you need to GET ONE!

People ask me all the time, “do I need a survey?” In almost every situtation, residential or commercial, the answer is “YES!” If you are buying real estate, get a survey. It’s the only way to know what piece of land you are actually buying. Surveys are usually not all that expensive, relative to the other transaction costs, they’re usually not difficult to obtain, they convey a great deal of information very quickly (remember, a picture is worth a thousand words) and … from a legal perspective … they give you another party to hold accountable (the surveyor) if down the road you find that the property was described incorrectly or some other error occurred. So, just plan on getting a survey and get it early in the due diligence process, please! It will make all our jobs easier.

“Isn’t the description of the property already on the property appraiser’s website?” “Can’t I just use that appraiser’s parcel number or something?”

These are common follow-up questions I hear. “Well, it might be there,” I say, “at least some description will be there, but you can’t rely on it.” The property descriptions found on county property appraisers’ websites are often abbreviated versions of the full legal description of the property and they are notoriously incomplete, indecipherable or just plain wrong. They are a shorthand description of the property as made up by the staff person responsible for inputting that information on the appraisers’ website. The parcel identification number of a property is merely a reference number tying it to the tax information in the appraiser’s and tax collector’s database, including that potentially incorrect legal description, nothing more! It is just not appropriate to rely on that information as the basis for the conveyance of real property. So, no, you can’t just use that description or that ID number. Get a survey.

When the survey is ordered, or as soon thereafter as possible, you or your commercial real estate attorney should give the surveyor as much information as possible about the property and very clear instructions as to what is required for your transaction, including any specific requirements the lender may have. If available, the surveyor should be provided with the legal description of the property, a copy of the title commitment and copies of all title exception instruments, a copy of a prior survey, if one is available, and the names of all parties to whom the survey should be certified. The surveyor should be instructed to show all title exceptions (such as easements) that can be plotted on the drawing or, if they aren’t plottable, to explain why. The surveyor should also be instructed to provide a preliminary copy of the survey so it can be reviewed prior to the surveyor signing and sealing the final version. The more information that is provided early on and the clearer the survey instructions, the more time (and, potentially, money) that is saved by all parties involved. An experienced attorney should be well-versed in communicating with your surveyor so the process is as efficient as possible.

OK, I’ve got my survey (finally!) – What’s it telling me and how do I read this thing?

A typical survey contains several important categories of information, including (1) the legal description of the property, (2) the surveyor’s notes and survey legend, (3) the surveyor’s certifications and (4) the actual drawing of the land. These are also the primary areas to focus on when reviewing a survey so we’ll go through them one at a time, as we did earlier when we discussed the various sections of a title commitment.

(1) Legal Description

When I review a survey, I generally start by reviewing the written legal description of the property. The legal description might be very short or very long, simple or complicated. If a property consists of a platted lot, for example, the description might be as simple as “Lot 6, Riverview Acres, according to the Plat thereof …” and then cite the plat book and page where the plat was recorded. At the other end of the spectrum, the description could be paragraph after paragraph of confusing metes and bounds measurements and angles and distances and degrees and minutes and seconds and directions and weird language like “thence proceed … ” and “from the point of commencement” and what-not. No matter what, a careful review of the legal description is critical. Ideally, the survey legal description will be identical to both the description found in the prior deed by which the seller took title to the property and the legal description shown in the title commitment. And when I say “identical” I mean “identical.” As in, “identical,” down to every last degree, minute, second, measurement, comma, semi-colon, and so on. If those three descriptions are not identical, it is important to ask why and do further investigation to make sure you are getting the property you think you are getting. Primarily, though, the legal description should be reviewed for accuracy and consistency. All errors or typos must be corrected.

(2) Surveyor’s Notes and Legend

The surveyor’s notes contain informational and explanatory statements by the surveyor about the property or the drawing. For example, there should be a note stating whether the surveyor was provided with the title commitment and whether the survey depicts all items shown in the commitment. There should be a note about the surveying standard followed by the surveyor and that the survey complies with that standard. There may be a note confirming that all above-ground improvements, utilities and apparent uses of the property are depicted on the survey, and so on. The notes convey information from the surveyor that isn’t readily shown in the drawing itself and help explain and interpret what is drawn. Likewise, the surveyor’s legend is a list of symbols or abbreviations used by the surveyor in the drawing and their definitions or meanings. All of this is valuable information in understanding the content of the survey (both what is included and what is not included) and the manner in which the survey was prepared.

(3) Surveyor’s Certifications

The Surveyor’s Certifications may be contained in the surveyor’s notes or may be stated separately and they are a series of statements by the surveyor regarding the content of the survey and a list of the parties to whom the survey is “certified,” meaning the parties who are entitled to rely on the survey as being an accurate depiction of the property. Typically, the survey should be certified to the purchaser of the property, the purchaser’s lender, if any, the title company issuing the purchaser’s title insurance policy and the title agent. Sometimes the seller will ask to be a certified party, as well. Certified parties have standing to sue the surveyor if they rely on the survey and it is later discovered that it contained errors that caused that party to suffer a loss of some kind, so it’s important to provide the surveyor with a proper list of the parties to whom the survey should be certified. Often, a commercial lender will have a standard form of survey certification that it requires to be on the face of the survey or executed by the surveyor as a separate instrument.

(4) The Drawing

After reviewing the legal description, the notes and the certifications, the survey drawing itself can be reviewed and understood. Following the written legal description of the property, the property boundary as drawm should be traced to make sure the written and drawn descriptions are identical. Any discrepancies should be corrected or explained. This is like math, there’s only one right answer (usually.) It’s either right or it’s not. Your attorney shouldn’t be bashful about telling the surveyor to fix typos or to explain any discrepancies.

All title exceptions listed in the commitment should be shown on the drawing or, if they can’t be plotted, the surveyor should provide an explanation as to why not. Often the surveyor will confirm that certain title exception items do not affect the property at all and those items can then be deleted from the title policy.

The drawing should also be reviewed to confirm that there is legal access to the property (i.e. that there is some connection, either physical or legal, to a public right of way by which the property can be accessed,) that any easements do not adversely affect the proposed use of the property, that any beneficial easements necessary for utilities or any other purpose are in place, and whether any of the improvements located on the property encroach onto adjacent property, or vice versa. At the most basic level, the survey should be reviewed for signs of anything that impacts the title to the property, access to the property or the future use of the property. Your attorney should be experienced at identifying such things and have the ability to work with the surveyor or other affected parties to resolve any issues that are identified.

Signed and Sealed! 

After the preliminary survey has been reviewed and it is confirmed as meeting all of the requirements provided to the surveyor, the surveyor can be instructed to sign it and seal it with his official seal and to provide as many signed and sealed originals as are required by the various parties to the transaction. This final survey is an important instrument that will be valuable to you, as the buyer, likely for the entire period that you own the property. It may serve as the basis for future improvements to the property, future loans that may be secured by a mortgage on the property, the future sale of all or any portion of the property or even to resolve possible boundary disputes, and it will be well worth the time and money invested in it’s preparation and review.

Both the title commitment and survey provide a great deal of information about the property in their own right, but they are most valuable when reviewed and understood together. When reviewed by an experienced commercial real estate attorney, together they provide almost “3D” level of information about the property with respect to both its physical and legal characteristics. Involving your attorney early in the process and obtaining the title commitment and survey as quickly as possible during your due diligence period will greatly improve your knowledge and understanding of the real estate you are buying and will help ensure that your decision to purchase the property is a well-informed one.

As always, thanks for reading.  BH

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Contracts, Leases, Easements and Legal Stuff in general: Attorney review, first! Sign, second. Not vice versa!!

From time to time I’m going to post quick thoughts as they occur to me that I think are worth saying, and worth repeating, perhaps over and over, because as events happen throughout the day here in the law office I’m continually reminded of general rules that seem basic to attorneys yet aren’t understood by non-attorney folk, even those who, although they’re very smart, maybe even well educated, are just not well versed in legal matters.

One of these is this: When presented with a commercial real estate (“CRE”) contract, a residential real estate contract, a lease, an easement or, for that matter, just about any significant legal document, please have it reviewed by your attorney before you sign it! I can’t tell you how often people contact me and say “I just signed this contract. Will you look it over?” I can tell you already the answer is going to be “Sure, but no matter what it says you’re stuck with it because you already signed it. I’m glad to tell you what it says but I doubt we can change it at this point.” Sigh. Remember, attorney review, first, then sign. Not vice versa!

In the area of CRE leases, in particular, some prospective tenants don’t understand the impact of signing the Letter of Intent (the “LOI”) when negotiating with the landlord. Unlike most other types of transactions in which the LOI is just the beginning point of negotiations and is non-binding on the parties, the LOI in a CRE leasing situation is commonly understood to be, basically, the “contract” between the landlord and tenant, at least with regard to the business terms. After the LOI is signed in a CRE leasing situation, the tenant is generally stuck with the business terms stated in the LOI, which will be inserted directly in the lease. In commercial leasing situations, then, don’t even sign the LOI before you get attorney input unless you are a sophisticated commercial tenant and know what you’re doing.

So, if you learn nothing else from this blog, please remember: Attorney review, first! Sign, second. Please.