easement in Birmingham Alabama

Do Easements Transfer with The Sale of Property In Alabama?

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An easement refers to an interest owned by a non-owner in a real estate property. These are fairly common in Alabama and may exist without the property owner being aware of them. However, if one exists, it needs to be conveyed by a contract or deed. A seasoned real estate attorney can help you uncover any easements on a particular property before you purchase it.

Transfer of Easement During Property Sale in Alabama

Easements form part and parcel of the affected land. They remain on the land even when the property changes hands. As a subsequent owner, you will be obliged to let the easement owner use the property for any intended purpose. This makes it vital to determine the exact easements on a property before finalizing the purchase.

There are several ways of figuring this. The best one is to hire a capable real estate attorney in Alabama that can find out about the easements. Generally, title papers prepared by the insurance company list the prevalent easements on a property.

Effect of Utility Easements on Property Transfer

These are the most common type of easements and may not necessarily have an impact on your day-to-day life. You can live on the property, plant on it, and build on it, as long as it doesn’t interfere with the utility’s use of the easement. These easements get transferred to the new property owner on sale.

You should call the utility company if you want to know whether there are any easements on the property. You can also ask the city hall or county land records office for a map of all easement locations.

Effect of Private Easements on Property Transfer

Property owners can sell the easement to someone else. This can be a neighbor or someone else in the form of a driveway, path, sewer, or solar access. It’s essential that you get copies of the actual easement documents where private easements are concerned. This will give you a clear idea about the type and extent of easements.

For instance, if the previous property owner gave solar access easement to a neighbor, it may severely limit your options to build or grow on the property. Being unaware of the terms of the private easement may result in you unknowingly interfering with the easement rights. You may be held liable for any damages as well.

Don’t forget to get the reference number of the private easement from the original owner. You can check local public records at the county clerk’s office and obtain a copy of the easement.

Effect of Easements by Necessity on Property Transfer

A legal easement can exist if it is an absolute necessity. This is even if there is no written agreement. For instance, you can’t block your neighbor’s access to their property if the only way through is by crossing your property.

This is termed “easement by necessity.” You should make sure you ask about such easements since they cannot be removed. Landowners cannot interfere with the neighbor’s legal right if there is such an easement on the land.

It is important that you consult with an experienced attorney to determine if there are any easements by necessity on the property. Your attorney will also be able to advise on the extent of interference on your property rights by the easement.

Effect of Prescriptive Easement on Property Ownership Rights

A prescriptive easement is similar to an easement by necessity, except the person needs to use another’s land openly and continuously for a particular purpose. Prescriptive easement and adverse possession have several similarities. However, payment of property taxes is not required.

In addition, there can be more than one person with rights to a prescriptive easement. For instance, there may be a path on the land that people use as a shortcut or a driveway on another’s land. The best way of preventing prescriptive easement is to grant written permission for the use of the property. Prescriptive easements are inherited with the property.

Avoiding Legal Disputes over Easements in Alabama

Easements are more common than you would think in the world of real estate law. In many cases, these are avoidable, especially where easements by necessity and utility easements are concerned. You should consult with an attorney as soon as possible if you are having legal concerns regarding an easement. The same holds true if you are in the process of negotiating an easement.

Legal battles over the transfer of easements and other rights can drag on for several months or years and become a costly and stressful affair. Your attorney will take the necessary steps to help you preempt the situation. An experienced real estate attorney will provide you with the legal guidance and advice you need to have a smooth purchase and transfer of property.

Get an Experienced Real Estate Attorney on Your Side

The real estate attorneys at the BHM Law Group have extensive experience, knowledge, and resources to resolve your concerns, provide you with the right legal guidance, and suggest the most judicious ways to move forward. To schedule your complimentary consultation with our legal team, call us at (205) 964-9764 or fill out this online contact form.

 

commercial tenants

What Happens If You Break a Commercial Lease?

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A commercial lease obligates both the landlord and tenant to abide by the terms and conditions put forth in the agreement for a set period of time, usually a year. Breaking the lease refers to leaving a fixed-term lease without paying the remainder of the rent due.

There are a number of potential legal repercussions if you break a commercial lease. You should get astute legal advice from an attorney with experience in both real estate and contract law if you are considering terminating a commercial lease early.

Operational and Logistical Costs of Breaking a Commercial Lease in Alabama

Commercial leases are legally binding contracts, which you cannot walk away from. This is unless you have an agreement with the landlord that allows early termination. You may need to pay the following in addition to the rent due and other leasing costs:

  • Termination penalties.
  • Cost of finding a new lease and advertising the property.
  • Clean-up costs.
  • Legal costs if an agreement cannot be reached with the landlord.
  • Any costs mentioned in the early termination clause.

How to Break a Commercial Lease Legally in Alabama

The first step to take when you want to end your commercial lease is to read the agreement. You need to look out for early termination and bailout clauses, which allow you to leave the premises if sales are low. Co-tenancy clause is another helpful clause that can allow you to break the lease legally. This is when the occupancy drops below a pre-set level or the anchor tenant leaves.

Commercial leases set in popular areas can usually be terminated early without any hindrance since the landlord can find another tenant quickly. This is especially if the landlord gets a higher rate for the space or you offer a lump sum payment for terminating your obligations.

These are a few other legal reasons to break a commercial lease:

  • You are bankrupt.
  • Your landlord breached a lease provision.
  • You and your landlord have agreed to early termination. You can enter a deed of surrender that releases you explicitly from all your lease obligations.
  • You are allowed to assign or transfer the lease.
  • You have a break clause or a termination clause in the agreement.
  • Your landlord has allowed you to sublet the property.

When Can a Landlord Break a Commercial Lease in Alabama

Contract law legally binds lease agreements in Alabama. Based on this, it can be broken under certain circumstances. You and your landlord should both sign an agreement if you decide to break the lease early, to protect against future legal action. Commercial landlords are allowed to break the lease in certain circumstances without the tenant’s agreement:

  • Tenant doesn’t pay rent on time.
  • Tenant damages the property or doesn’t take care of it.
  • Tenant violates the terms of the lease agreement.

The Landlord and Tenant Act of 1954 provides tenants with an added security of tenure. You should speak with an attorney immediately if your landlord is terminating the lease early without your consent. Landlords can refuse to renew commercial lease agreements under certain situations:

  • Breach of contract.
  • Landlord offers another suitable property.
  • Sub-tenant has leased a part of the building when the landlord wants to lease the entire building as one unit.
  • Landlord plans on rebuilding the building.
  • Landlord plans on using the building for their own use.

Evicting a Commercial Tenant in Alabama

Landlords can evict a commercial tenant for numerous reasons. Moreover, Alabama laws protect a tenant’s rights. Your landlord can only evict you if you violate the terms of the lease or do not pay rent. Landlord will need to provide the following to evict a commercial tenant:

  • Provide the tenant with a notice of eviction.
  • Landlord can file a complaint in court when the notice expires.
  • Issue a summons to commence the eviction process.
  • Tenant needs to respond to the summons deadline.

The court may order an eviction if the tenant doesn’t respond to the deadline on the summons. You need to be fully informed of all consequences of breaking a commercial lease. Don’t forget to seek advice from a commercial real estate attorney.

Showing That a Landlord Broke the Terms of Commercial Lease

You may have a legal reason to move if your landlord fails to satisfy any terms of the lease. You can show the following to break the lease:

  • That your landlord failed to make the needed repairs that compelled you to break the lease.
  • You gave the landlord a written demand for making repairs, which they were supposed to make under Alabama law. Landlords get 14 days in Alabama to make non-emergency repairs. You need to keep a copy of the letter. You can turn in the key when you move if the landlord doesn’t make the necessary repairs.

You should take pictures that prove the landlord failed to make the necessary repairs. This can be useful later on if the landlord brings any legal action against you.

Talk to a Skilled and Knowledgeable Real Estate Attorney – Book Your Consultation Today

Breaking a commercial lease can lead to significant legal complications and financial costs. Our highly rated real estate attorneys at BHM Law Group can help you prevent making any costly mistakes while making sure your rights according to the terms and conditions of the lease are fully protected.

We have also helped numerous tenants and landlords identify clauses within the lease agreement as well as utilize legal interpretations that might allow them to break a commercial lease legally. We are happy to provide you with a complimentary consultation. Call us at (205) 964-9764 or reach us online.

net lease vs gross lease

Net Leases vs. Gross Leases: Which One Is Right for My Business?

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A one-size-fits-all or a cookie-cutter approach does not work when it comes to commercial leases. The difference between a net lease and a gross lease can make all the difference to your establishment and business.

In this article, we will outline the differences between a gross lease and a net lease so that you can make the right choice for your business. You should be prepared to get legal representation from an experienced real estate attorney in Alabama in order to protect your business interests.

Gross Lease

A Gross lease is considered tenant-friendly in the real estate circuit. This is because the rent is all-inclusive. This means that you don’t need to pay anything additional for occupying the property, such as janitorial services or utilities.

In some cases, a gross lease may also include property taxes and insurance. Taking this into account, it’s fundamental that you carefully negotiate such types of leases.

From a tenant’s point of view, a gross lease is beneficial if your business consumes excessive power or has certain particular requirements. At the same time, it is important to understand that the concept of a gross lease is to keep things easy for the tenant without overburdening the landlord. A knowledgeable attorney can prove to be invaluable during these types of negotiations.

Advantages and Disadvantages of a Gross Lease for a Business

Gross lease may be helpful to your business in the following ways:

  • There are no additional costs associated with renting the property since the cost of rent is fixed and is all-inclusive.
  • You don’t need to take care of any administrative duties associated with the space, which can be time-saving.

Primary cons associated with a gross lease include:

  • Rent could be higher even though there are no additional costs that you need to take care of.
  • An unresponsive or lax landlord may not maintain the property properly causing trouble for a customer-facing business.

Net Lease

There are several types of net leases. However, a triple-net lease is the most common in Alabama. At face value, these are considered to be more pro-landlord. You won’t just pay rent for occupying the space, but will also be responsible for paying a share in the insurance, taxes, and maintenance of common areas. This includes janitorial services, parking lots, and lobbies.

This is how a typical net lease transaction plays out – the tenant pays a base amount to the landlord in the form of rent plus an additional amount in the form of property insurance, taxes, and CAM (common area maintenance). You would be required to pay a proportionate share of the NNN costs.

Additional rent paid against actual expenses is usually reconciled between the tenant and landlord at the end of each lease year. It is important for tenants to be wary of any amount increase in additional rent. You should also negotiate caps to make sure that you don’t find yourself locked in a lease with unacceptable levels of inflated costs.

Triple net lease places a major part of the responsibility on the tenant. However, there are upsides to these since you can have a transparent view of your operating expenses in relation to the amount charged. You can make better decisions for leasing commercial property. In addition, with the right negotiation, you may actually be able to pay less than what you would have in a gross lease.

Advantages and Disadvantages of a Net Lease for a Business

A net lease may be helpful in the following ways:

  • Potentially lower cost of rent to the tenant.
  • Transparency in relation to the cost of property’s utilities.
  • Triple net leases are generally offered in more attractive locations.
  • You can use your business’ creditworthiness to negotiate a lower rate.

Cons of a triple net lease for businesses:

  • You are basically paying to maintain an asset that you don’t own.
  • Tenants are stuck with increased responsibilities related to maintenance and bill payments.
  • The responsibilities of maintaining the property fall on the tenant.
  • Unforeseen costs are always possible in the form of insurance premium spikes or damages.

Choosing the Right Commercial Lease

There are several different factors to consider when choosing one type of commercial lease over another. While gross leases may appear costly upfront, net leases may drain the bank account in the long run. On the flip side, a triple net lease may give you the enhanced peace of mind and transparency you require to run a business since you know exactly what you are spending on.

It takes an informed real estate attorney to understand the individual nuances that apply to a particular situation. For this reason, it is crucial that you don’t enter a lease without first consulting with a seasoned lawyer.

Get Legal Help from a Qualified Real Estate Attorney in Alabama

The seasoned attorneys at the BHM Law Group are strong negotiators and realize the importance of investing in the right lease for a business. Whether you are an established business or a fledgling start-up, our attorneys can help you with all matters related to corporate and real estate law.

Schedule your free and confidential consultation with us today. Call (205) 964-9764 or write to us online.

 

property title

What Happens When Someone Has a Legal Claim to Your Property?

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It’s not entirely uncommon to find out that someone else has a legal claim to your property in Alabama. It can be stressful and frustrating to know that you don’t have a legal claim to your property, especially when you are hoping to sell it or make alterations or additions to the property.

An experienced real estate attorney in Alabama can help you determine the best course of action to take in these situations.

Alabama Adverse Possession Concept

Adverse possession is a concept dating back to the Middle Ages. Based on this, thousands of property owners still continue to lose their property rights because of squatters or neighbors that have a tendency to encroach.

You may lose the property title to a trespasser or squatter that decides to stake a claim to ownership if all requirements are met. The same holds true if a neighbor with whom you share property boundaries decides to encroach on your land.

You should be aware of Alabama’s rule on adverse possession if you want to ensure your land remains yours. Alabama recognizes two types of adverse possession under Ala. Code Ann. § 6-5-200:

  • Adverse possession with the color of title, based on a law passed by the state legislature
  • Adverse possession by prescription, based on common law

These are a few circumstances when a trespasser can be deemed permissible for adverse possession:

  • The trespasser actively manages or controls the property
  • The trespasser uses the property without your permission
  • The trespasser has not attempted to conceal their occupancy
  • The trespasser pays taxes on the property in use

If any of the aforementioned circumstances continue for at least 10 years, you may have an adverse possession action against your property. Property owners can prevent the trespasser or a neighbor from staking a legal claim by initiating a quiet title action.

Retain Property Ownership by Using a Quiet Title Action

An unlawful encroachment on a property is usually the result of some sort of misunderstanding involving disputed property lines. The first step to take when you are worried about losing a legal claim to your property is to inform the trespasser that they are using your land without your permission.

You should allow them a reasonable opportunity for repairing any damage and removing personal property. Most people understand the situation and move on.

In case of a dispute, your next step should be to hire a qualified real estate attorney. Your lawyer will file a quiet title action for preventing the conversion of ownership.

Quiet title actions are basically lawsuits that request the court to authenticate the true ownership of the property. The most ideal outcome to this action will be for the judge to award the property in your favor.

There is always a risk of the other party prevailing in a quiet title action. You can ensure the merits of your case are presented clearly by hiring a qualified Alabama attorney.

Other Areas of Title Dispute Where Quiet Title Action Can be Helpful

Quiet title action can be used in a wide array of property disputes, with these being the most common:

  • Estate Sale: To clear up claims on the ownership of titled property or real property following the death of the owner. This usually occurs in situations where there is insufficient proof that all heirs were notified of the estate sale.
  • Removing Lienholders: Quiet title action can be filed if you have issues with a mortgage lender whose complete interest in the property has not been dealt with properly even though the loan has been paid off.
  • Title Gaps: For clearing the title to a property that has not been occupied for some time.
  • Easement & Boundary Disputes: Quiet title action can be used for sorting out issues related to land access imposed by disputed property liens and easement.

Settling tax issues on a property, fraudulent conveyance of the property by forged deed or coercion, or competing claims by reverters, lien holders, remainders, and missing heirs are a few other grounds for a quiet title action.

It’s important to understand that a quiet title action doesn’t allow the new owner the same level of protection as a clear title in most cases. The new owner cannot sue the previous owner of the property unless the property is acquired through a warranty deed.

In some jurisdictions, quiet title action cannot be used for clearing up all issues with the title. It may only be used for clearing up specific title defects or claims.

Talk to a Skilled and Knowledgeable Real Estate Attorney – Book Your Consultation Today

The Birmingham Law Group has the knowledge and experience that is needed to protect your property title rights. We have been serving a diverse set of clients throughout Alabama, including both individuals and businesses, for several years.

We will provide you with an in-depth legal evaluation of your situation. Call us at (205) 964-9764 or reach us online to set up an initial free consultation.

 

commercial tenants

Legal Protections Needed for Commercial Tenants in Alabama

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You are probably looking forward to generating a tidy profit in your business as a commercial tenant. You want to attract more people to use your products or services and increase your revenues. All this can only be achieved when you have an ideal space to do work in.

Knowing your rights when leasing a commercial property can help you protect your best interests. Commercial rental agreements turn sour too often. You won’t benefit from a war of words. Having an outstanding business attorney on your side can help you arrive at a quicker resolution.

Repairs in the Commercial Property

One of the key issues that typically result in a dispute is determining fault and responsibility for repairs. Business contracts can establish the ground rules and responsibilities. Based on this, there is always the potential for grey areas, which can result in confusion. A majority of landlords and leaseholders are not entirely versed with relevant commercial property lease laws in Alabama.

This makes it necessary to work with an attorney that can mediate disputes and help you move forward with your business needs. The alternative is being stuck in a contract that stifles your business or leads to ruined goodwill and reputation.

It’s vital that you define the party responsible for maintaining the commercial building and its interiors. It usually seems obvious that the landlord will be in charge of repairing things, such as leaking roofs and broken HVAC systems.

Taking this into account, everything is not always as clear-cut. Who is responsible if you carry out an extensive build-out? If you bear the cost of new shelving, electrical wiring, and carpeting, will the landlord still be responsible for any repairs? What if there is a broken neon on your signboard?

Such issues can result in potentially serious and costly conflicts if not addressed within the lease agreement.

Breach of Commercial Lease Terms

The lessor or the person leasing out the commercial property is usually responsible for creating a contract for the lessee or the potential entity/individual renting out the space. This agreement needs to include all legal provisions for protecting the involved parties. There are instances when a commercial lease contract may favor the lessor unfairly.

Commercial landlords may occasionally end an agreement before the lease term comes to an end. This can create serious disruptions to the daily activities of a business.

It may also interrupt your income stream as a business owner. You will need to scramble to find a new location while bearing the cost of advertising the new location and relocating. You may end up losing a significant amount of business in the entire episode.

You can include generous grace periods within the commercial lease agreement to protect your business interests as a tenant. The landlord can be required to mitigate any damages incurred if they breach the contract.

Don’t hesitate in consulting with an experienced attorney if you believe that the business contract has you all set up to fail. You are essentially running a business and any negative press can harm your future prospects.

Mitigation or working with an attorney may help in arriving at an agreed solution if you are accused of breaching the lease.

Disputes Related to Tenant Eviction

When relationships with your landlord become strained to the point of eviction, you should immediately consult with an attorney. There are certain laws in place dictating the rights of a lessee when a commercial rent agreement is breached. Working with an attorney usually produces preferable results to accepting an eviction.

Use the Legal Provisions to Your Advantage

Business clustering occurs when a certain type of business attempts to capture a greater portion of the market share in a particular location. This may work for certain businesses but is not always a prudent idea.

This is especially true in the case of small-scale businesses. For instance, if you have a small mom-and-pop grocery store, you probably won’t last long if a major chain moves in right next door.

You need to use provisions within the commercial lease agreement to prevent this from happening. These provisions define how the tenant is going to use the premise. It also limits the type of tenants permitted to lease adjoining spaces.

Personal Guarantees in the Lease

Landlords require commercial tenants to provide a personal guarantee. You don’t need to worry about exposing personal assets, such as your home to the landlord and creditors in case you default on the lease agreement if you have positioned the business as a separate corporation. Corporate business entities essentially remove the need for personal liability protection.

Owners can be held personally liable for the damages incurred to the lessor if they default on the lease. This is for the entire term of the lease, including the attorney’s costs, fees, and defenses.

Tenants should be careful in agreeing to provide personal guarantees. You should try and negotiate limitations to potential damages if a default occurs.

Get the Right Legal Guidance from an Experienced Commercial Real Estate Attorney

The knowledgeable attorneys at Birmingham Law Group can review the commercial lease agreement to ensure it contains all the necessary legal protections. When the stakes are high, you need the best legal advice from our competent business lawyers. To schedule your free initial consultation, call us at (205) 964-9764 or fill out this online contact form.