The following are a few frequently asked questions related to some of the areas of the law practiced by the Law Offices of Barry D. Lites LLP. If you do not see your question answered,
please feel free to submit your question on the “Contact Us”
email or call our office for a free consultation.
Q: I am thinking of buying an existing business. Should I take over the seller’s lease or enter into a new one with the landlord?
A: Real estate is only one part of the subject of review when looking to buy a business. The answer to the question depends on whether (1) the terms of the lease are favorable compared with the current commercial rental market, and (2) the landlord agrees to a transfer of the lease and is willing to state in writing that the lease is valid and has no outstanding defaults. The lease should be reviewed carefully to make sure that you will be able to operate your business as planned.
Q: We need financing to expand our business? What are our options?
A: Depending on the stage of your business’ life, there are a number of avenues for financing. Obviously, banks are a source of funding but they are typically conservative, meaning that they will require a history of positive business operation, assets to provide as collateral, etc. Private business lenders are also an option. Their requirements may be more liberal than traditional banks; however, they too often look for accounts receivable or other collateral. Private equity firms provide both financing and operational guidance but they often seek a measure of control of your business in the form of equity (stock, etc.) in your company and/or board of director seats. Each source of financing looks for assets such as cash on hand, accounts receivable, innovative products and/or services, unique market opportunities and intellectual property (patents, etc.). Call us for a free consultation to discuss your options in real time.
Q: I have received an offer from a local hospital to buy my practice.
What should I look for?
A: The term “buy” has taken on different meanings in the context of healthcare practice acquisitions by hospitals. Often, the hospital assumes the office’s cost overhead and places the practitioners on salary. Key elements to consider are term of the agreement, productivity requirements and overall control over operation of the practice.
Q: I am thinking of buying commercial property. What should I consider other than the rents the property is generating?
A: As with buying a business (see above), there are many aspects of “due diligence” that must be performed prior to signing a contract to purchase income-producing property. For example, the condition of the building must be assessed, the use must be confirmed as legal under the applicable zoning laws, the environmental status of the property (both the building and the land) must be assessed. All of the results of the due diligence exercise will be captured in the contract and other documents between the buyer and seller so that the parties are protected from future liability..
Q: What should I do if I receive a notice of intent to foreclosure on my home?
A: Respond immediately. In New York, these notices are required to be sent 90 days prior to the start of foreclosure proceedings. Be honest about your financial situation and try to find a resolution with your current lender. Do not abandon your home as you will relinquish certain rights and expose your home to possible vandalism. You can be held liable for the costs required to repair any damage due to vandals.
Q: I have some property that I want to develop into condominiums.
Where do I start?
A: No matter where your property is located, you will first want an assessment of the real estate market in order to determine that there is a market for the type of property you are seeking to develop. Once you are satisfied that a market exists, an assessment of the zoning rules that apply to your property is necessary. We can help make that assessment to determine whether a zoning change or variance is required. After that, site plans,environmental impact statements, contractor selection and permitting are all part of the process.
Q: How long does the foreclosure process take?
A: Currently, in New York State, due to the overwhelming number of foreclosures that are occurring monthly, foreclosure on your home can take upto 24 months or more from the date you receive foreclosure papers. Use this valuable time to improve your financial status and submit applications to bank and government-funded loan modification programs that can potentially save your home.
Q: What is a mortgage modification?
A: A mortgage modification is a document that changes the terms of your current mortgage. It can change the number of years the mortgage term (10, 15, 20, 30 or 40 years), the interest rate, and or the amount owed (a/k/a the principal balance). Following a payment default, the goal of the modification is to reduce the monthly payment to something that is affordable for the borrower. A mortgage modification application requires many documents.The process can take a long time.
Q: Is a commercial mortgage modification different from a residential modification?
A: From the borrower’s perspective, both the commercial and the residential mortgage modification seek to achieve the same result: lower monthly payments. A commercial mortgage loan modification (also known as a workout), looks at the income and expenses of the business as opposed to the residential homeowner’s
personal income and expenses.
Q: What is a short sale? a deed in lieu of foreclosure?
A: These are options for borrowers who are behind on their payments andare facing foreclosure. A short sale is a sale of the home for less than the principal balance of the mortgage loan. The homeowner must find the buyer. A deed in lieu of foreclosure is when the homeowner transfers ownership of the property the bank. Both options require bank approval. Most banks will require that the homeowner to try to complete a short sale before they will accept a deed in lieu of foreclosure.
Q: Is bankruptcy an option and how long do foreclosures and bankruptcies
stay on your credit report?
A: A bankruptcy will not help homeowners avoid paying their mortgage loans. Bankruptcy should be considered when a person has significant amounts of personal debts such as credit card debt and medical expenses. Foreclosures stay on your credit report for seven years. Bankruptcies remain on your credit history for 10 years.
If you are facing foreclosure, considering bankruptcy or have other debt relief issues, seek the expert advice that only an experienced real estate and bankruptcy attorney can provide.