Owning real estate has its benefits. It provides homeowners an effective edge against inflation as well as the security of knowing they can continue living in their home without fear of eviction or rent increase, no matter what happens to the economy. If they decide to move after a period of inflation has increased property prices, the price of their homes will likely have increased as well, making the move affordable. A rising tide lifts all ships.
Commercial properties are viable investments for sure, but are riskier - - certainly so when the property is financed. On the one hand, they serve as an inflation hedge over time and they can provide immediate rental income. Being able to raise rents provides an additional inflation hedge. But commercial properties can be highly sensitive to the business cycle. In a down cycle, the owner may not be able to raise rents. Worse, he may actually lose tenants whose business fail in the declining business cycle. Worse yet, the owner might be unable to replace the departed tenants at rental rates high enough to cover the mortgage payments, property taxes, insurance and numerous other expenses. Unlike a home owner who can simply stay put and ride out the storm, a commercial property owner faced with substantial negative cash flow can be forced to sell at a loss or lose the property through foreclosure, wiping out his entire investment.
So, it’s important to remember that, while fortunes are made in real estate, the investments come with their share of challenges. There are expenses: mortgage payments, property taxes, insurance, repairs and maintenance costs. There are improvement costs: roof replacement, deck replacement, new doors, windows, siding and paint. There can be title issues: Easements, ownership, heirship, occupancy, and boundary matters. There can be people issues: unsatisfactory neighbors, disagreeing co-owners, buyers, sellers, brokers, problem landlords, problem occupants (including tenants, co-owners, and hold-over relatives), property managers, and government regulators.
Still, owning real estate has brought substantial wealth to many people over the years. That’s because, to the many challenges, there are solutions. Through general civil litigation and negotiation, Mr. Kelly has helped clients solve their real estate problems.
As a real estate attorney, Michael F. Kelly has helped clients with the following real estate litigation issues:
Purchase Agreements: Mr. Kelly has forced defaulting sellers to sell and defaulting buyers to buy, pay money damages, or terminate the contract and get out of the way of the next deal.
Title Issues: Resolved easement right issues; mortgagee vs. owner issues (e.g., that option to buy back was actually a loan/mortgage transaction); and miscellaneous title disputes.
Partition Actions: He forced the sale of jointly owned properties in disputes between co-owners. In each instance, this was accomplished by helping an owner exercise his legal right to force a sale by bringing a partition action. In some instances Mr. Kelly helped clients recover ouster damages where one co-owner had prevented another from occupying their jointly owned property.
Settled Accounts: He successfully litigated and negotiated settlement of accounts of co-owners, partners, joint venturers, and the like concerning questions of contribution, charges for use of the property, and allowable expenses and interest for moneys advanced and reimbursements for improvements.
Successive Interests: Through litigation and negotiation, he terminated successive estates in real property (life estates, reversions, and remainder interests, including interests of unborn children) with a cash-out for the parties.
Brokering: Mr. Kelly was licensed as a California real estate broker for 24 years and a member of the Multiple Listing Service for Marin, Sonoma, Napa, Solano, and Yolo Counties. He has helped clients buy and sell property as a broker; but, in many instances, he has relied on his legal knowledge and experience to avert deal-killing situations with practical strategizing, negotiating, and drafting of the needed letter, clause, or document.