Archives: Real Estate

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Poorly Drafted Leases Can Cause Headaches for Tenants and Landlords (Part I of II)

These 10 common problem areas can easily be avoided by paying attention to details. It’s a dangerous world out there. We cannot eliminate all risks. But a well-drafted lease can minimize risk, and a poorly drafted lease can unnecessarily create serious problems for either a landlord or a tenant. Following are instances in which a … Continue Reading

Does Homeownership Still Beat Renting?

Zillow, a real estate listing and analytics company, recently looked at the “break-even” time horizon for owning a house versus renting in a number of markets across the nation. “Breaking even” means the amount of time it will take for the cost of owning a home to be equal to the cost of renting. The … Continue Reading

Leasing Restrictions in Condominiums Are Still “Use” Restrictions

We wrote about the Filmore v. Unit Owners Association of Centre Pointe Condominium case in a prior blog post, when the Washington Court of Appeals issued its decision in the case. The court of appeals ruled that, based on the language of the Washington Condominium Act, any amendment to restrict or remove a restriction on leasing condominium units … Continue Reading

Neighbor Loses Right to Use Driveway: Part II

Last year, we wrote about the Gamboa v. Clark case, in which Division III of the Washington State Court of Appeals set a high bar for proving the existence of prescriptive easements. A prescriptive easement arises when one openly and adversely uses the land of another for over ten years, usually for access, to such a degree … Continue Reading

Back in the Bubble?

It has been close for a few months, but Seattle house prices and full-on seller’s market are now confirmed in this report from the Puget Sound Business Journal. Prices are now all the way back to the 2006 peak with no indication of slowing down. In the long-term perspective, these gains may not be as extreme … Continue Reading

Millennial Myth-Busting

After years of media speculation and pundits declaring that the millennial generation is so very different and may never own a car or a house, changing all business and real estate markets, shares some actual research data showing that the lull of the great recession may actually fit historical patterns. With household-formation rates back to normal … Continue Reading

HOA Budgets Do Not Include Assessments

The Washington Homeowner Association Act, Chapter 64.38 RCW, requires the homeowner members to approve an annual budget of revenues and expenditures proposed by the board of directors. If the budget is not approved by the required percentage of homeowners, the prior budget remains in effect. A group of homeowners in the Sudden Valley Community Association … Continue Reading

More Flexibility for Reverse Exchanges

When the real estate market is hot, it can be a great time to sell real property. And because people don’t want to pay tax unless they have to, it can be attractive to complete a 1031 exchange with the proceeds from the sale. But a hot real estate market can be a difficult time … Continue Reading

Many Related-Party Exchanges Are Perfectly Legal!

In the good old days, a taxpayer could exchange his high-basis relinquished property for his wife’s low-basis replacement property. Thereafter, the taxpayer could sell the replacement property (which now has a substituted high basis) with little or no gain. This technique is known as a basis swap. Years ago, Congress changed the law to plug … Continue Reading

Exchanging Adjacent Parcels: One Exchange or Two?

When an exchange involves two parcels of real estate that are adjacent to each other, it can be tricky to figure out whether they should be treated as two exchanges or a single exchange. This is a distinction with a difference! It matters because the 45-day identification rules and the 180-day replacement-property rules cover only … Continue Reading

Portland Metro Tops Office and Apartment Data

The PSU Center for Real Estate just released a quarterly report with helpful data on both national and regional trends. The eyebrow-raisers that caught my eye are Portland’s top-ten relative rent increases in Multifamily and Office sectors. What does it mean for Portland to report the lowest metro-area office vacancy rate in the country? With … Continue Reading

Real Property Tips for Nonprofit Subsidiary LLCs

Nonprofit charities regularly own or receive donations of real estate. In the real estate world, holding title to property in an isolated limited liability company is so common that many lenders’ and brokers’ template forms refer to “______ LLC,” with the blank for the buyer’s name. Some real estate lenders require loan collateral to be … Continue Reading

Exchanges and Single-Member LLCs

While a limited liability company (“LLC”) is treated as a partnership for tax purposes, a single-member limited liability company (“SMLLC”) is not. Its existence is ignored for tax purposes and its income, expenses, and other tax attributes are reflected on the tax return of its sole member. For tax-free exchange purposes, the SMLLC can be … Continue Reading

Is the Suburban-to-Urban Trend Reversing Itself?

The Wall Street Journal has published an interesting perspective on a recent national trend: the faster population growth in urban areas over suburban areas. There are likely as many explanations as there are urban and suburban areas, and not every urban/suburban area may be experiencing the phenomenon, but one thing is clear–the death of the suburbs … Continue Reading

Homeowners Swimming Above Water

Clearing foreclosure backlogs and increasing prices have sharply decreased the percentage of “underwater” home mortgages. While some signals remain mixed and the future behavior of unprecedented numbers of investors paying cash and renting out single-family homes is unknown, the home-price recovery is here. Interest rates have crept up and inventories are low in active markets, … Continue Reading

Court Imposes Significant Restrictions on Amending Covenants

The Chiwawa Communities Association is a planned residential community in Chelan County comprised of a mix of permanent and vacation residents. As is typical of planned communities or subdivisions, the developers recorded covenants to govern the general plan of development. The covenants contain many detailed restrictions on the use of the lots within the community, … Continue Reading

Rush to the Permit Counter to Vest Your Project in the Event of an Appeal

In 2009, Snohomish County amended its comprehensive plan and zoning regulations to allow for a mixed-use/urban-center development in Point Wells. Soon after passage of these amendments, the developer applied for project permits. In the meantime, opponents of the project filed appeals of the amendments to the growth hearings board. Eventually, the hearings board invalidated the … Continue Reading

Courts Disagree Over a Loan Guarantor’s Liability

It’s an all-too-familiar scenario for commercial lenders: a commercial loan has gone into default, and the borrower is unable to cure. The loan is secured by a deed of trust and a guaranty. The lender pursues a nonjudicial foreclosure. After the trustee’s sale, a sizable deficiency remains. The lender turns its attention to the guarantor. … Continue Reading

Minimizing Risk in a Construction Contract: From a Contractor’s Perspective

Based on a survey of case law, several key areas often lead to disputes between owners and contractors on a construction project. Careful drafting of the construction contract can benefit both sides by clearly defining expectations, eliminating ambiguity, and reducing the risk of delay of performance or payment. Click here to read the full article.… Continue Reading

National Home Price Winter Cooling—But Some Local Warmth

National Home prices have reached roughly 2004 levels, so all but the bubble peak is recovered to a regular range. Unfortunately, for many in states like Florida, Arizona and Illinois that range still leave 20-30% of homeowners underwater, just not as deep of water. In the Portland and Seattle regions, we seem to be just above … Continue Reading

Before Foreclosing, Make Sure That You Know Exactly What Your Deed of Trust Secures

Lenders frequently use a combination of deeds of trust and guaranties to secure commercial loans. Once a default occurs, and the borrower fails to cure, lenders often directly pursue a nonjudicial foreclosure as their first legal action to avoid litigation. But under a recent case, lenders may not want to be so quick to follow this … Continue Reading