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Every week, attorney Sean Bukowski reviews what is going in Austin, San Antonio, Dallas, and throughout Texas. Past topics have included:
- Property Tax Relief
- Austin’s Housing Problem
- Texas Regulations
- Emergency Funding
- Property Managers
Austin 2023 Winter Storm Insurance - Do you need to make a claim?
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Austin 2023 Winter Storm Insurance - Do you need to make a claim?
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Making a clean break with your former partner, one property at a time | Partition Process in CRE
Read more about this in our blog - https://bukowskilawfirm.com/post/what-happens-to-real-estate-in-a-partnership-dispute/ When ...
Read more about this in our blog -
https://bukowskilawfirm.com/post/what-happens-to-real-estate-in-a-partnership-dispute/
When partnerships split up, they often need to determine what to do with the real estate the partnership owns.
One potential solution is ...partition – to divide the property between the partners.
Partition can be an expensive and lengthy process. As a result, it is often best to resolve the issues outside of litigation.
Sometimes people split up. And partnerships dissolve. That’s an unfortunate consequence of dealing with human beings and their individual idiosyncrasies. Because we do a lot of real estate litigation, we see these disputes a lot.
The question we are dealing with this week, therefore, is what happens when things go bad and there is a split on the horizon? What are the parties supposed to do about the property they own together? One potential solution in Texas is partition. But it may not be the best solution. So what is it? And is it a good option for you and your partner? That’s what we are here for.
What is Partition?
Most people who enter a partnership – whether its personally or professionally – do so with the best of intentions. We want it to work out. But we know that many (most?) of them will eventually fail. And when that does happen, we need to know what to do with the assets. This is when you need a good law firm to step in and help with the allocation of assets among the partners.* And because this is nominally a commercial real estate blog, we will specifically focus on real estate.
First, we always suggest the partners try to come to an agreement among themselves to reach a settlement. This is going to be a much better option because it will save the time, headache, and expense of litigation. It is just a much cheaper and more effective route than litigation.
But if you cannot reach an agreement, one potential solution is partition. In law, a partition is when parties seek a court order to divide up a property into separate, concurrent tracts so that each party owns a separate piece of the initial, overall property. Often in real estate, especially when there is an improvement on the property, this ultimately leads to a forced sale of the property. Because it cannot be divided in a manner that is fair and reasonable to both parties. Thus the only way to split it is to force a sale and split the proceeds.
How Does Partition Work?
Parties generally resort to partition when they cannot agree on an equitable way to split the property. As a result, the process is usually contentious and leads to litigation. In general, a partition action follows the following steps:
First, one of the parties will file a petition to split the property;
The Court then determines if the property can be partitioned in kind or must be sold;
As we discussed above, often the property cannot be split reasonably, and therefore the court orders the property sold; and
The property will be sold at auction, with certain costs being deducted from the sales price (e.g. surveyor, appraiser, cost of auction, etc.).
For a real estate owner, there are some very real issues with this process. Specifically:
The process is very expensive. You will need a lawyer throughout it and, especially if the partition is contentious, that can be very expensive;
It can be a long process; and
Ultimately the property could be sold at auction. It may not be the best time to sell the property. And the price may be further depressed from selling at an auction as opposed to marketing it out.
As a result, going through a partition is likely to depress the total return the partners could get from resolving the issues themselves without resorting to partition. But if and when you find yourselves at an impasse, Bukowski Law Firm can help you find a reasonable solution.
*Also, its why having a law firm draft the initial partnership agreement is so important. Often, the parties can avoid the messiness, time, and expense of litigation on the back end if they only had a good partnership agreement on the front end.[+] Show More
https://bukowskilawfirm.com/post/what-happens-to-real-estate-in-a-partnership-dispute/
When partnerships split up, they often need to determine what to do with the real estate the partnership owns.
One potential solution is ...partition – to divide the property between the partners.
Partition can be an expensive and lengthy process. As a result, it is often best to resolve the issues outside of litigation.
Sometimes people split up. And partnerships dissolve. That’s an unfortunate consequence of dealing with human beings and their individual idiosyncrasies. Because we do a lot of real estate litigation, we see these disputes a lot.
The question we are dealing with this week, therefore, is what happens when things go bad and there is a split on the horizon? What are the parties supposed to do about the property they own together? One potential solution in Texas is partition. But it may not be the best solution. So what is it? And is it a good option for you and your partner? That’s what we are here for.
What is Partition?
Most people who enter a partnership – whether its personally or professionally – do so with the best of intentions. We want it to work out. But we know that many (most?) of them will eventually fail. And when that does happen, we need to know what to do with the assets. This is when you need a good law firm to step in and help with the allocation of assets among the partners.* And because this is nominally a commercial real estate blog, we will specifically focus on real estate.
First, we always suggest the partners try to come to an agreement among themselves to reach a settlement. This is going to be a much better option because it will save the time, headache, and expense of litigation. It is just a much cheaper and more effective route than litigation.
But if you cannot reach an agreement, one potential solution is partition. In law, a partition is when parties seek a court order to divide up a property into separate, concurrent tracts so that each party owns a separate piece of the initial, overall property. Often in real estate, especially when there is an improvement on the property, this ultimately leads to a forced sale of the property. Because it cannot be divided in a manner that is fair and reasonable to both parties. Thus the only way to split it is to force a sale and split the proceeds.
How Does Partition Work?
Parties generally resort to partition when they cannot agree on an equitable way to split the property. As a result, the process is usually contentious and leads to litigation. In general, a partition action follows the following steps:
First, one of the parties will file a petition to split the property;
The Court then determines if the property can be partitioned in kind or must be sold;
As we discussed above, often the property cannot be split reasonably, and therefore the court orders the property sold; and
The property will be sold at auction, with certain costs being deducted from the sales price (e.g. surveyor, appraiser, cost of auction, etc.).
For a real estate owner, there are some very real issues with this process. Specifically:
The process is very expensive. You will need a lawyer throughout it and, especially if the partition is contentious, that can be very expensive;
It can be a long process; and
Ultimately the property could be sold at auction. It may not be the best time to sell the property. And the price may be further depressed from selling at an auction as opposed to marketing it out.
As a result, going through a partition is likely to depress the total return the partners could get from resolving the issues themselves without resorting to partition. But if and when you find yourselves at an impasse, Bukowski Law Firm can help you find a reasonable solution.
*Also, its why having a law firm draft the initial partnership agreement is so important. Often, the parties can avoid the messiness, time, and expense of litigation on the back end if they only had a good partnership agreement on the front end.[+] Show More
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The Power of Urbanization in Austin Texas and Dallas Texas: Let's Create a More Vibrant City
There are a number of reasons to be pro-urbanization. Including that it leads to more dense housing, providing more overall housing ...
There are a number of reasons to be pro-urbanization. Including that it leads to more dense housing, providing more overall housing units.
At least two Texas cities – Dallas and Austin ...– are some of the best cities for urban living in the country.
As Texas becomes more urban, cities should make it more friendly for developers to meet the needs of its growing populace.
I write a lot about housing in this blog. Especially about density and urbanization. Because this is nominally a commercial real estate blog and there is a nationwide housing crisis. So it’s a pretty natural topic to write about.
If you read this regularly, you probably know that I am a big fan of urbanization. There are lots of reasons for this – greater density and urbanization provide a lot of benefits to a community. And it also just means there are more houses for people to live in. So as often as possible, I try to promote dense, urban spaces where people can live, work, and play.
Despite this, I never really considered Texas’s cities to be particularly friendly to urban living. They didn’t strike me as terrible, but certainly not an easy place to live. But a new study may get me to change my mind.
Texas Cities Are Great for Urban Living
I’m not totally sure who StorageCafe is but they put out a new study that listed the best places in the US for downtown living. And, much to my surprise, Dallas was number one. And if that is a surprise, wait until you see who was number two. Austin. Our Austin, Texas.
When I saw this study referenced in the Dallas Business Journal, I thought there must be some funky metrics StorageCafe is using to get to those rankings. According to its analysis, compared to other cities, Dallas has luxury apartments that are large in size and have great aceess to fitness centers. The article also noted that, while Dallas used to embrace sprawl, to meet the growing demand for housing recently, Dallas has embraced higher density and built a lot more urban housing options.
Similarly, Austin ranks high in green apartment buildings, apartment size, and having an educated population. Austin is also one of the liveliest areas of the country in the study with 14.6 restaurants and 2.8 theaters per 1000 locals downtown.
And this really is a trend throughout all of Texas. Since approximately 2011, rural areas in Texas have grown by about 1%. But urban areas have grown by about 18% during that same time. And now, about 90% of the new Texans are looking to live in urban, metropolitan areas.
So while Texas has a large rural population, it is also one of the most urban states in the country. As of 2010, 84.7 percent of Texans lived in urban areas. And it has undoubtedly grown since then. Indeed, Texas has six of the top twenty-five largest cities in the US.
Meeting the Demands of Urban Living
I do not know if Dallas and Austin should be ranked one/two in a study of best places to live in an urban setting. That’s not ultimately that important. The more important takeaway is that people keep moving to Texas. And increasingly those people want to live in an urban setting. And we need to continue to develop dense, urban housing to meet those needs.
To do that, we need Texas cities to work with developers to make it easier to build dense housing in urban areas. This includes all of the usual suspects:
Permitting – It just takes too long and is too difficult to get approved – especially in Austin.
Compatibility – This may be the number one hindrance to increased density. Its hard not to get frustrated driving up and down Lamar or East Seventh Street and seeing it lined with two story buildings.
Minimum sized lots – The minimum size should be decreased to allow denser housing.
Public transportation – Its important to have great public transportation to go with urban living.
These are, of course, just a few of the examples. But they are important to the future of Texas’s cities. And the more cities work with developers to make building urban housing more accessible, the more we will be able to meet the housing demand where it is – in the heart of the city[+] Show More
At least two Texas cities – Dallas and Austin ...– are some of the best cities for urban living in the country.
As Texas becomes more urban, cities should make it more friendly for developers to meet the needs of its growing populace.
I write a lot about housing in this blog. Especially about density and urbanization. Because this is nominally a commercial real estate blog and there is a nationwide housing crisis. So it’s a pretty natural topic to write about.
If you read this regularly, you probably know that I am a big fan of urbanization. There are lots of reasons for this – greater density and urbanization provide a lot of benefits to a community. And it also just means there are more houses for people to live in. So as often as possible, I try to promote dense, urban spaces where people can live, work, and play.
Despite this, I never really considered Texas’s cities to be particularly friendly to urban living. They didn’t strike me as terrible, but certainly not an easy place to live. But a new study may get me to change my mind.
Texas Cities Are Great for Urban Living
I’m not totally sure who StorageCafe is but they put out a new study that listed the best places in the US for downtown living. And, much to my surprise, Dallas was number one. And if that is a surprise, wait until you see who was number two. Austin. Our Austin, Texas.
When I saw this study referenced in the Dallas Business Journal, I thought there must be some funky metrics StorageCafe is using to get to those rankings. According to its analysis, compared to other cities, Dallas has luxury apartments that are large in size and have great aceess to fitness centers. The article also noted that, while Dallas used to embrace sprawl, to meet the growing demand for housing recently, Dallas has embraced higher density and built a lot more urban housing options.
Similarly, Austin ranks high in green apartment buildings, apartment size, and having an educated population. Austin is also one of the liveliest areas of the country in the study with 14.6 restaurants and 2.8 theaters per 1000 locals downtown.
And this really is a trend throughout all of Texas. Since approximately 2011, rural areas in Texas have grown by about 1%. But urban areas have grown by about 18% during that same time. And now, about 90% of the new Texans are looking to live in urban, metropolitan areas.
So while Texas has a large rural population, it is also one of the most urban states in the country. As of 2010, 84.7 percent of Texans lived in urban areas. And it has undoubtedly grown since then. Indeed, Texas has six of the top twenty-five largest cities in the US.
Meeting the Demands of Urban Living
I do not know if Dallas and Austin should be ranked one/two in a study of best places to live in an urban setting. That’s not ultimately that important. The more important takeaway is that people keep moving to Texas. And increasingly those people want to live in an urban setting. And we need to continue to develop dense, urban housing to meet those needs.
To do that, we need Texas cities to work with developers to make it easier to build dense housing in urban areas. This includes all of the usual suspects:
Permitting – It just takes too long and is too difficult to get approved – especially in Austin.
Compatibility – This may be the number one hindrance to increased density. Its hard not to get frustrated driving up and down Lamar or East Seventh Street and seeing it lined with two story buildings.
Minimum sized lots – The minimum size should be decreased to allow denser housing.
Public transportation – Its important to have great public transportation to go with urban living.
These are, of course, just a few of the examples. But they are important to the future of Texas’s cities. And the more cities work with developers to make building urban housing more accessible, the more we will be able to meet the housing demand where it is – in the heart of the city[+] Show More
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Getting Charged Up - Should multi-family properties have electric car charging stations?
- Electric vehicle sales are increasing at a rapid pace. This presents a unique new challenge to multifamily community owners and ...
- Electric vehicle sales are increasing at a rapid pace.
This presents a unique new challenge to multifamily community owners and developers to meet the needs of their tenants.
- There are ...potential tax credits that are available for installing electric vehicle charging stations.
- I drive a Tesla. I’m not writing that to be cool (is it cool?) or out myself as an Elon Musk fanboy. Neither of those statements are accurate.
I’m writing that up front because I want you to know that this week’s topic is near and dear to my heart. And I’m a little biased because I love my Tesla. It’s a great car.
Also I should admit up front that I am blatantly stealing the Austin Business Journal’s topic idea for this week. So you should definitely read this article. Because its really good and goes more in depth than I can in 700 (or so) words.
You likely do not need me to tell you this, but electric car sales are increasing. Significantly. And with that comes the need for charging stations. But what does that mean for multifamily owners, operators, and developers? Well that’s what we are going to talk about this week.
Electric Car Sales are Growing
All you have to do is drive around town and you can see that electric car sales are increasing significantly. For many reasons, they have become very popular. And surely their popularity will continue to grow.
In the third quarter of 2022, there were over 200,000 electric vehicles sold in the United States. For the year, they represent approximately a 6% market share of total cars sold in the US. Tesla still owns a large percentage of that market share. But almost all the auto companies – including BMW, GM, Ford, etc. – offer electric cars now and have plans to increase their sales.
Some estimates are that approximately 30% of all vehicles sold in 2030 will be electric. And it will continue to grow from there – up to potentially hitting the net zero gas emissions projections by 2050.
Electric Cars and Apartment Living
For us in the commercial real estate world, an obvious question presented by this growth is what to do with our multifamily projects. If residents are going to be driving electric cars, they are going to need some place to charge them. There is already a high demand for charging stations around the state. And its only going to increase as more electric cars are sold.
So what is an apartment community to do? There is little doubt that the owners, managers, and developers are going to have to install charging stations. As I was doing my research for this article, I found lots of websites that would tell a potential renter which apartment communities have charging stations. It is, therefore, already a marketing advantage for a community. And will obviously become moreso as sales increase.
What I cannot answer right now is how many charging stations does a community need? I guess that is mostly a business decision. But it makes a lot of sense to be planning for the future. While a community may only need one or two now, in the near future, it may need a lot more than that.
It also depends on what type of charging the community installs. I am not an expert in this area, but there are different types of charging stations:
Level 1 charging stations are the least powerful and generally take up to 43 hours to get a 249 mile charge.
Level 2 stations are more powerful and generally take up to 11 hours to get a full 249 mile charge.
Level 3 stations are the most powerful and generally take up to 1 hour for that full charge.
These charging stations undoubtedly can be expensive. But the Inflation Reduction Act includes a federal tax credit of up to 30% of the cost of installing commercial EV equipment for up to $100,000 per project. That can help defray the cost. And help install charging stations that will likely become necessary components – and marketing hooks – of any new multifamily community.[+] Show More
This presents a unique new challenge to multifamily community owners and developers to meet the needs of their tenants.
- There are ...potential tax credits that are available for installing electric vehicle charging stations.
- I drive a Tesla. I’m not writing that to be cool (is it cool?) or out myself as an Elon Musk fanboy. Neither of those statements are accurate.
I’m writing that up front because I want you to know that this week’s topic is near and dear to my heart. And I’m a little biased because I love my Tesla. It’s a great car.
Also I should admit up front that I am blatantly stealing the Austin Business Journal’s topic idea for this week. So you should definitely read this article. Because its really good and goes more in depth than I can in 700 (or so) words.
You likely do not need me to tell you this, but electric car sales are increasing. Significantly. And with that comes the need for charging stations. But what does that mean for multifamily owners, operators, and developers? Well that’s what we are going to talk about this week.
Electric Car Sales are Growing
All you have to do is drive around town and you can see that electric car sales are increasing significantly. For many reasons, they have become very popular. And surely their popularity will continue to grow.
In the third quarter of 2022, there were over 200,000 electric vehicles sold in the United States. For the year, they represent approximately a 6% market share of total cars sold in the US. Tesla still owns a large percentage of that market share. But almost all the auto companies – including BMW, GM, Ford, etc. – offer electric cars now and have plans to increase their sales.
Some estimates are that approximately 30% of all vehicles sold in 2030 will be electric. And it will continue to grow from there – up to potentially hitting the net zero gas emissions projections by 2050.
Electric Cars and Apartment Living
For us in the commercial real estate world, an obvious question presented by this growth is what to do with our multifamily projects. If residents are going to be driving electric cars, they are going to need some place to charge them. There is already a high demand for charging stations around the state. And its only going to increase as more electric cars are sold.
So what is an apartment community to do? There is little doubt that the owners, managers, and developers are going to have to install charging stations. As I was doing my research for this article, I found lots of websites that would tell a potential renter which apartment communities have charging stations. It is, therefore, already a marketing advantage for a community. And will obviously become moreso as sales increase.
What I cannot answer right now is how many charging stations does a community need? I guess that is mostly a business decision. But it makes a lot of sense to be planning for the future. While a community may only need one or two now, in the near future, it may need a lot more than that.
It also depends on what type of charging the community installs. I am not an expert in this area, but there are different types of charging stations:
Level 1 charging stations are the least powerful and generally take up to 43 hours to get a 249 mile charge.
Level 2 stations are more powerful and generally take up to 11 hours to get a full 249 mile charge.
Level 3 stations are the most powerful and generally take up to 1 hour for that full charge.
These charging stations undoubtedly can be expensive. But the Inflation Reduction Act includes a federal tax credit of up to 30% of the cost of installing commercial EV equipment for up to $100,000 per project. That can help defray the cost. And help install charging stations that will likely become necessary components – and marketing hooks – of any new multifamily community.[+] Show More
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Solving the Austin Artist Housing Crisis with John Riedie
John Riedie, CEO of Austin Creative Alliance (ACA), takes on the tough topic of the arts and cultural crisis in Austin. Gone are the ...
John Riedie, CEO of Austin Creative Alliance (ACA), takes on the tough topic of the arts and cultural crisis in Austin. Gone are the days where the city of Austin ...was an affordable, alternative environment for weird and wonderful artists nationwide. Now, as Austin becomes one of the most expensive places to live in the country, John’s team at ACA has to step up to advocate for the forgotten artists and arts organizations, and encourage personal and corporate philanthropy to keep Austin’s culture afloat.
Timecoded Guide:
[00:00] Podcast begins - Solving the Austin Artist Housing Crisis with John Riedie
[02:10] Supporting artists at the Austin Creative Alliance
[07:22] Affordable housing for Austin’s starving artists
[13:17] Rising commercial real estate prices bankrupt cultural nonprofits
[16:55] Private vs public funding to preserve the weird art of Austin
[22:46] Appealing to businesses for philanthropic art support
What does the Austin Creative Alliance (ACA) do for individual artists and local arts organizations?
As CEO of Austin Creative Alliance, John spends his days supporting both individual artists and arts nonprofits on many different levels. From emergency grants to training opportunities, the landscape of the city of Austin has been kept culturally afloat by the consistent operating support and technical resources that the ACA is able to provide. Alongside finances and resources, the ACA also advocates for art at a city level and applies for public funding.
“We sponsor up to 100 projects. What that means is that we'll help them raise money, we'll help them figure out how to pay their bills and make their careers work. And then, we advocate for them at the city level, mostly for resources for arts and culture.”
How are you seeing the individual artists you work with react to the Austin housing crisis? Are artists leaving Austin?
The luster of Austin’s arts scene is wearing off for many local artists, especially as housing prices rise and rent becomes nearly unaffordable in Austin apartment complexes. Seeking a more affordable environment, artists established in Austin as living outside the city and commuting to work. Meanwhile, younger artists aren’t picking Austin as the place to start their new careers and are picking areas with better funding and housing for artists, like Houston.
“I've been in the arts community my entire adult life. We see fewer young artists moving here now. Who would? If you're a young person who wants to make a career in the arts and you start thinking about where to go, one of the most expensive cities in the country is not on your list.”
What effect has rising commercial real estate prices had on Austin’s arts and cultural nonprofits? What about music venues and performance spaces?
After moving to Austin for college, John watched the continuously growing city of Austin transform from an artist’s mecca to a barely-affordable place to live. In the process, John has seen a lot of performance venues, especially for musicians, and studio spaces go out of business or lose their leases. Not only do artists lose employment when these spaces close, but Austin loses essential cultural venues that are unique to the city.
“I think there's definitely fewer music venues. I do think having more artists is going to create more spaces because artists are very resourceful and creative people, they'll make it. So, the more artists you have, the more stuff is going on, no matter what.”
How can we solve some of these problems for local artists? What is philanthropy like in Austin compared to other cities?
While public funding does exist for artists in Austin, John explains that access needs to be expanded and philanthropy is seriously lacking. In terms of fundraising efforts, the old money oil wealth of Houston might not exist in Austin, but personal and commercial wealth absolutely exists in a plentiful way. Businesses should be engaging with the arts philanthropically and, according to John, they desperately need to in order to keep Austin an interesting place to live.
“It's always a combination of public funding and philanthropic funding. Where Austin falls short is the philanthropic side, so we do well with the public funding, but we haven't really figured out how to unlock that philanthropy.”[+] Show More
Timecoded Guide:
[00:00] Podcast begins - Solving the Austin Artist Housing Crisis with John Riedie
[02:10] Supporting artists at the Austin Creative Alliance
[07:22] Affordable housing for Austin’s starving artists
[13:17] Rising commercial real estate prices bankrupt cultural nonprofits
[16:55] Private vs public funding to preserve the weird art of Austin
[22:46] Appealing to businesses for philanthropic art support
What does the Austin Creative Alliance (ACA) do for individual artists and local arts organizations?
As CEO of Austin Creative Alliance, John spends his days supporting both individual artists and arts nonprofits on many different levels. From emergency grants to training opportunities, the landscape of the city of Austin has been kept culturally afloat by the consistent operating support and technical resources that the ACA is able to provide. Alongside finances and resources, the ACA also advocates for art at a city level and applies for public funding.
“We sponsor up to 100 projects. What that means is that we'll help them raise money, we'll help them figure out how to pay their bills and make their careers work. And then, we advocate for them at the city level, mostly for resources for arts and culture.”
How are you seeing the individual artists you work with react to the Austin housing crisis? Are artists leaving Austin?
The luster of Austin’s arts scene is wearing off for many local artists, especially as housing prices rise and rent becomes nearly unaffordable in Austin apartment complexes. Seeking a more affordable environment, artists established in Austin as living outside the city and commuting to work. Meanwhile, younger artists aren’t picking Austin as the place to start their new careers and are picking areas with better funding and housing for artists, like Houston.
“I've been in the arts community my entire adult life. We see fewer young artists moving here now. Who would? If you're a young person who wants to make a career in the arts and you start thinking about where to go, one of the most expensive cities in the country is not on your list.”
What effect has rising commercial real estate prices had on Austin’s arts and cultural nonprofits? What about music venues and performance spaces?
After moving to Austin for college, John watched the continuously growing city of Austin transform from an artist’s mecca to a barely-affordable place to live. In the process, John has seen a lot of performance venues, especially for musicians, and studio spaces go out of business or lose their leases. Not only do artists lose employment when these spaces close, but Austin loses essential cultural venues that are unique to the city.
“I think there's definitely fewer music venues. I do think having more artists is going to create more spaces because artists are very resourceful and creative people, they'll make it. So, the more artists you have, the more stuff is going on, no matter what.”
How can we solve some of these problems for local artists? What is philanthropy like in Austin compared to other cities?
While public funding does exist for artists in Austin, John explains that access needs to be expanded and philanthropy is seriously lacking. In terms of fundraising efforts, the old money oil wealth of Houston might not exist in Austin, but personal and commercial wealth absolutely exists in a plentiful way. Businesses should be engaging with the arts philanthropically and, according to John, they desperately need to in order to keep Austin an interesting place to live.
“It's always a combination of public funding and philanthropic funding. Where Austin falls short is the philanthropic side, so we do well with the public funding, but we haven't really figured out how to unlock that philanthropy.”[+] Show More
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Consider the details in the settlement statement during a Commercial Real Estate Transaction.
Read more about this topic here: - ...
Read more about this topic here: - https://bukowskilawfirm.com/post/do-you-need-a-commercial-real-estate-settlement-statement-in-austin-texas/
There are a lot of fast moving parts in a commercial real estate closing.
For example, its very important to have your own settlement ...statement to compare to the title company’s.
There are a lot of specific areas in the settlement statement to keep track of. And a good lawyer can help you do that.
I started last week’s blog article talking about how exciting a new year is. I’m coming back to that well again this week. I don’t know – I guess I’m just really looking forward to 2023 and all that it will bring. I know a lot of people are concerned about where the economy is headed. And that’s certainly legitimate. But I also see a lot of opportunity on the horizon. And that is exciting.
Specifically, I think there are going to be a lot of commercial real estate deals completed this year. Once everyone adjusts to the new normal – whatever that may be – I think we will see a lot more deals moving forward.
As you probably know, commercial real estate deals are complicated. There are a lot of moving parts – especially as you get close to the closing date. As a result, you really want to make sure you are on top of everything that is happening. And, of course, have a great lawyer to guide you through the process. And one area where this is especially important is in the closing statement. So that is what we are going to talk about this week.
Closing Process is Very Busy
Anyone who has closed a commercial real estate transaction already knows this, but there are a lot of moving parts during the closing process. And the days move by very quickly. As a result, you and your team need to be on top of everything that is going on.
For example, its extremely important to monitor the title search and title commitment. Of course this is where a great real estate lawyer should lead the review. But its very important to make sure there are no challenges to the title of the property. How that is done is a topic for another blog article in the future.
This week we are going to focus more on the settlement statement. It will generally come from the title company – but you should definitely make sure you have your own internal copy that you put together. Because as good as the title company may be, it may not know everything that goes into the closing.
As a result, every step of the way – with every version of the settlement statement that you get from the title company – you need to review it and make sure there are no errors.
What to Look for in the Settlement Statement
While the entire settlement statement is of course important, here are a few specific things that you should look for:
Title fees – These will be provided for by the title company. In general in Texas, the seller pays for the owner policy and the buyer has to pay for any endorsements and the simultaneous loan policy. If you have any question about any of the fees, check with the title company.
Lender fees – The lender will likely provide its own settlement statement to the title company to include in the overall one. Its important to go through the lender’s statement to make sure the fees are consistent with what was proposed in the original term sheet.
Credits – Either in the purchase agreement or just as an agreement between the parties, the buyer and seller may agree to some credits. Its important to check to make sure those are included in the settlement statement because the title company may not be aware.
Prorations – The purchase agreement should explain how the prorations are calculated. But its always important to have your own calculations to check to make sure they are correct.
This is, obviously, just a few of the important pieces of the settlement statement. You should always check and double check each version to make sure its correct. And having a good lawyer to also check and walk through it with you is always a great idea.[+] Show More
There are a lot of fast moving parts in a commercial real estate closing.
For example, its very important to have your own settlement ...statement to compare to the title company’s.
There are a lot of specific areas in the settlement statement to keep track of. And a good lawyer can help you do that.
I started last week’s blog article talking about how exciting a new year is. I’m coming back to that well again this week. I don’t know – I guess I’m just really looking forward to 2023 and all that it will bring. I know a lot of people are concerned about where the economy is headed. And that’s certainly legitimate. But I also see a lot of opportunity on the horizon. And that is exciting.
Specifically, I think there are going to be a lot of commercial real estate deals completed this year. Once everyone adjusts to the new normal – whatever that may be – I think we will see a lot more deals moving forward.
As you probably know, commercial real estate deals are complicated. There are a lot of moving parts – especially as you get close to the closing date. As a result, you really want to make sure you are on top of everything that is happening. And, of course, have a great lawyer to guide you through the process. And one area where this is especially important is in the closing statement. So that is what we are going to talk about this week.
Closing Process is Very Busy
Anyone who has closed a commercial real estate transaction already knows this, but there are a lot of moving parts during the closing process. And the days move by very quickly. As a result, you and your team need to be on top of everything that is going on.
For example, its extremely important to monitor the title search and title commitment. Of course this is where a great real estate lawyer should lead the review. But its very important to make sure there are no challenges to the title of the property. How that is done is a topic for another blog article in the future.
This week we are going to focus more on the settlement statement. It will generally come from the title company – but you should definitely make sure you have your own internal copy that you put together. Because as good as the title company may be, it may not know everything that goes into the closing.
As a result, every step of the way – with every version of the settlement statement that you get from the title company – you need to review it and make sure there are no errors.
What to Look for in the Settlement Statement
While the entire settlement statement is of course important, here are a few specific things that you should look for:
Title fees – These will be provided for by the title company. In general in Texas, the seller pays for the owner policy and the buyer has to pay for any endorsements and the simultaneous loan policy. If you have any question about any of the fees, check with the title company.
Lender fees – The lender will likely provide its own settlement statement to the title company to include in the overall one. Its important to go through the lender’s statement to make sure the fees are consistent with what was proposed in the original term sheet.
Credits – Either in the purchase agreement or just as an agreement between the parties, the buyer and seller may agree to some credits. Its important to check to make sure those are included in the settlement statement because the title company may not be aware.
Prorations – The purchase agreement should explain how the prorations are calculated. But its always important to have your own calculations to check to make sure they are correct.
This is, obviously, just a few of the important pieces of the settlement statement. You should always check and double check each version to make sure its correct. And having a good lawyer to also check and walk through it with you is always a great idea.[+] Show More
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