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The importance of commercial law for businesses
The importance of commercial law for businesses

The business world may be challenging and even downright unpleasant. Small businesses unexpectedly find themselves in a legal minefield or maze when a customer, employee, or business partner becomes troublesome. To have someone on your side when you need support, it’s usually a good idea to have a working relationship with some business lawyers who are familiar with the industry and comprehend the challenges at hand.

When it comes to how it applies to particular circumstances, commercial law is frequently very complicated. Since this is a very complex field of law, non-specialist attorneys frequently cannot offer much assistance. The sheer variety of potential problems necessitates expert handling.

As an illustration, the following are some of the topics addressed by commercial law:

  • Contract law
  • Commercial lawyers Sydney
  • Public liability
  • Business conduct
  • Consumer law
  • Commercial disputes
  • Commercial property, and 
  • Supply chain problems

These problems can, however, also be combined, and they are never straightforward. Additionally, complicating matters is the possibility of several parties to a dispute.

What the Commercial Law Covers

Commercial Law Covers

Commercial law is the body of legislation tasked with regulating business; it covers all aspects of commercial transactions and the legal repercussions of business interactions. It is crucial for people and organizations involved in regular business and commercial operations. The practice of commercial law assures compliance with all applicable laws governing business and commercial transactions, fostering an environment conducive to reasonable and fair business practices.

Without the guiding principles supplied by commercial law regulations, unethical and unjust company practices that do not adhere to ethical standards would be allowed to flourish. Due to its emphasis on regulating business civil actions, the area is typically considered a part of civil law. However, the consequences of breaking this code of law could result in both civil and criminal measures being taken against those who do so.

The goals of a corporate lawyer

Commercial law is one of the most common practice areas for lawyers globally. A commercial lawyer can work in a variety of industries, such as the private sector as a corporate lawyer or the public sector as a regulatory counsel. A commercial lawyer will most likely be a legal expert in corporate law, antitrust law, patents, intellectual property, and other business-related laws.

A lengthy education is required to become a business lawyer, which may begin with undergraduate studies. Although a bachelor’s degree in law is not necessary to work as a business lawyer, those who are interested in the field may opt to study for one in a closely connected field, such as business, economics, or communications.

The concept of commercial law is that it is a particular law that applies to specific people and activities. Its content is created by patrimonial legal relationships of a commercial nature (acts and deeds of trade); additionally, it is created by non-patrimonial relationships that are relevant to the commercial activity and in which the traders are found in relation to one another on an equal footing with respect to the law.

Duty of a Commercial Lawyer 

Duty of a Commercial Lawyer

A commercial and business lawyer’s primary duty is to assist his clients by giving them legal choices and advice on how to make decisions in a commercial setting. Corporate lawyers provide legal guidance on contracts that relate to corporate organization, buying and selling companies, preparing and developing commercial agreements, managing and assisting in the resolution of commercial conflicts, and negotiating technological license deals. This aids corporate, industrial, and commercial clients in managing their internal business processes.

A corporate law attorney will offer the required assistance in preparing documentation for the company, helping you make the right choices also allowing you to determine the dangers facing your business:

  • Commercial contracts – negotiations, drafts, additions, modifications, termination, and insertion clauses in any commercial contract; 
  • Commercial litigation – assistance or representation in the pre-trial negotiation phase and before the courts; 
  • Receivable recovery
  • commercial property – exploitation and protection, trademark registration 
  • Modifications of Constitutive Acts
  • Legal Advice

What exactly do corporate lawyers do?

Corporations or large firms are frequently the clients of commercial attorneys. As a result, a typical day can include tasks like reading and amending contracts, drafting legal documents for organizations, and analyzing corporate mergers. On the client’s part, it could also be necessary to possess strong negotiating abilities for the conditions of a contract or license agreement. As a result, the task will depend on your area of expertise as a business lawyer. However, a number of business attorneys are referred to as “commercial lawyers,” which means that they primarily serve one client and focus on the business’s legal difficulties.

Commercial and business attorneys frequently deal with litigation involving commercial disputes that take the conventional form of contractual claims. Commercial attorneys’ jobs include requesting that applicants assist their clients with litigation and assist them in being ready for potential opposition.

What makes excellent commercial lawyers?

A skilled business lawyer must possess great academic credentials, the capacity to think creatively, strong communication and negotiation abilities, and thorough attention to detail. To succeed in corporate and commercial law, you must acquire exceptional business and commercial law knowledge, current trends, and legislative and regulatory developments.

Additionally, you’ll need to become knowledgeable about commercial and company legislation in other nations where your clients have operations or want to make investments.

A commercial and corporate law attorney develops effective solutions.

A lawyer with expertise in business law has the responsibility of continuously studying the legal difficulties pertaining to the economic activity engaged in by his clients, in addition to advocating for them in court and offering the best solutions specific to each case. The client must therefore seek the finest answers for her situation and make use of the outcomes provided as soon as feasible.

Additionally, excellent corporate lawyers excel at project management, have in-depth knowledge of corporate law, are able to see both the big picture and the details, exercise excellent judgment, communicate with the client effectively to ensure everyone is on the same page, comprehend the client’s goals, and are responsive.

HOA Rental Restrictions – Owner Perspectives
HOA Rental Restrictions – Owner Perspectives

My homeowner association is trying to take away my property rights!  They say I can’t rent my home to a tenant.  They can’t do that! 

I’ve lost track of how many times I’ve heard those words from upset owners of condos and townhouses. Most Americans firmly believe they should be able to do whatever they want with their real estate, as long as no laws are broken.  After all, isn’t the ability to lease one of the basic rights of property ownership?

Normally, yes.  But owning a home in an HOA community is different.  When someone buys a condo or townhouse, their property is subject to the recorded Covenants, Conditions, and Restrictions (CC&Rs) of the homeowners association.  An essential element of the HOA lifestyle is that individuals must sometimes subordinate their wishes to the community’s best interests.

This is the most overlooked and misunderstood aspect of living in an HOA community. The majority decides what is best for the association and those decisions are binding on everyone.  Those with the power to set policies can also change them at any time (with a few exceptions). 

So when changes happen, it’s rarely accurate to say that a property right has been taken away from owners.  Instead, owners gave up certain rights for the HOA’s benefit at the time of purchase.  That’s why if the majority votes to limit leasing, those who disagree must still comply.

Must Read: Why You Don’t Own Your Front Yard

Human nature is partly responsible for the renting issue being so contentious.  Nothing speaks to us as loudly as our own self-interest.  Owners feel they should be able to lease their units whenever and however they want.  But deep down, those same people are not as steadfast about the neighbors’ right to do so.  What if the other owner(s) chooses tenants that break the HOA rules or cause property damage?  What if so many people decide to lease that the development begins to look and feel like a rental community?  Won’t that hurt the area’s ambiance and property values?

It’s easy to feel sympathy for owners who need to rent their condo or townhouse, but can’t.  This is especially true when the rental restrictions were passed after that particular owner bought. That feels unfair, like changing the rules of a game while it’s being played.  But it’s legal, as long as the lease limitation was adopted properly and there is no conflicting state law.

However, being legal doesn’t necessarily make leasing restrictions a good idea.  People’s lives change and that sometimes requires moving.  Losing a job, changes in marital status or medical issues can all create the need to sell one’s current home.  Unfortunately, the real estate market for the past few years has been a seller’s nightmare.

Lease restrictions work best in hot real estate markets because they prevent too many investors in HOA communities that want to remain mostly owner-occupied.  But in a bad market, these restrictions can harm owners and the neighborhood.  When owners can’t sell quickly and can’t have a tenant, the financial and emotional strain of an unwanted property leads to short sales, foreclosures, and abandoned real estate.  All of these outcomes drive down property values, the very thing rental restrictions are meant to preserve!  In these circumstances, HOA Boards would be wise to liberally grant hardship exceptions to the rental ban.

Why You Don’t Own Your Front Yard
Why You Don’t Own Your Front Yard

Most Minneapolis homeowners are shocked to learn they don’t own all of their front yards.

 People assume that the public sidewalk abuts the residential property line.  That’s a logical assumption and one that holds true in St. Paul.  So why isn’t it true in Minneapolis? 

As each neighborhood of Minneapolis was first built, developers dedicated part of their land to public right-of-ways by recording a deed or a plat map.  The location and size of those public easements were dictated by the city planners.  Early street right-of-ways were required to be 60 feet wide in residential areas.  Today, the typical width is 66 feet and the area is usually laid out like this:

For some reason, Minneapolis sidewalks have not been placed along the residential property lines.  Instead, the sidewalk edge closest to the house is usually 2-3 feet away from the property line.  This 2-3 foot wide strip looks like the rest of the privately-owned front yard, but it’s subject to a public easement.  And there are some areas where that public strip is 8-13 feet wide!

I couldn’t find a written explanation about why Minneapolis set the sidewalk away from the property line.  But here are some theories, based upon who might have made the decision.

Must Read: HOA Rental Restrictions – Owner Perspectives.

If a city engineer made the decision, it would have been based on cost efficiencies.  When the “extra” strip is placed next to the property line, the right-of-way construction path is narrower and therefore, cheaper.  A narrower swath requires less grading and fill, and affects fewer trees, fences and retaining walls.

If a city attorney made the decision, real estate law was the decisive factor. Because municipal workers would eventually need to repair the sidewalk, the attorney’s advice was to keep some public property on both sides.  Otherwise, workers would have to obtain permission to trespass from each adjacent owner whenever they needed to work in that area.

If politicians made the decision, it would have been aimed at currying political favor from voters.  The elected officials could have claimed they gave home owners a larger front yard for free (even though a public easement was on part of it).

It’s also possible that traditional construction plans dictated the design simply because no one revised them when circumstances changed.  The pavement, boulevard, and sidewalk fully used the original 60-foot wide street right-of-way.  When a 66-foot width later became the new standard, the older and narrower layout may have continued by default, leaving the “extra” 3-foot wide strip next to the property line.

Regardless of why this occurred, take note.  If you are a Minneapolis homeowner, city workers will mow the grass between the sidewalk and your lot line since it’s public land.  Nah, just kidding.  There has long been a municipal ordinance requiring the adjacent property owner to maintain the area between the property line and the curb.

Christmas Valley
The Story of Christmas Valley

Christmas Valley is an unincorporated area in Lake County, Oregon.  It has a population of 749 and was named after nearby Christmas Lake.  The town didn’t exist until 1961 when the M. Penn Phillips Development Company bought 90,000 acres there.  Penn Phillips was a veteran developer who specialized in creating new communities on desert terrain.  In a 1959 Time magazine article, Phillips claimed to have sold more parcels of land (around 100,000) than any man alive.

His development company quickly built 30 miles of roads, 15 homes, a motel, an airstrip, a 40-acre experimental farm, and an artificial lake.  The developer then began offering free plane trips from California for prospective buyers. 

Penn Phillips was charismatic and the picture he painted of the future Christmas Valley was so inviting that 90% of his land sold within three months.  He alternately described the area as ideal for farming, as a retirement mecca, and as a small town with a vibrant old-fashioned Main Street worthy of a Norman Rockwell painting.  He also preached that real estate investments were a great hedge against inflation. 

What was not well-known in 1961 is that Mr. Phillips started the Christmas Valley project after his California business license was suspended.  That suspension cited his company for engaging in “substantial misrepresentation in land sales and failure to exercise reasonable control over sales personnel.”  

By 1963, the town’s infrastructure was complete but only 203 people lived there.  Most residents were surveyors, road builders, or other employees of the Phillips Company.   The community’s goal of 5,000 people by 1965 was unattainable.  Penn Phillips abandoned the development in 1973, at the age of 86.

I know about Christmas Valley because after my father died, we discovered he owned land there.  No one knows why he bought it.  He faithfully paid the $30 property taxes for many years, but never saw the property.  His parcel is in an undeveloped area surrounded by sand dunes and has a negligible market value.

What’s the moral of this story?   Do thorough research and don’t get caught up in a developer’s hype.  Hire a knowledgeable Realtor® to help you understand the pros and cons of buying in particular areas.  And remember, real estate doesn’t come with a “return or exchange” policy.

Must Read

How to Challenge an HOA’s Rental Policy
How to Challenge an HOA’s Rental Policy

Frustrated condo and townhouse owners who are not allowed to rent out their units under the HOA’s grandfather clause or a hardship exception often ask “Is there anything I can do to challenge the rental policy?”  The answer is yes, but the challenges will not be quick, easy, cheap, or necessarily successful.  The options include:

1.  Become involved in your homeowner’s association and work to change the rental policy

 Get elected to the HOA Board, if possible.  But even without that, you can organize a group of owners who feel similarly.  Ask the Board to begin the process of amending the Governing Documents so that better rules can be adopted.  Provide a draft of the leasing policy that you believe should replace the existing one. 

2.  Advocate for a change in your state’s laws to limit the power of HOA Boards

Only a few states have done this and not surprisingly, they are the ones with the heaviest foreclosure burdens.  As an example, rental rights in Florida condominiums are now grandfathered in by law.  Changes in the ability to rent would only apply to current owners who consented to the amendment or owners who take the title after the amendment is recorded.  Minnesota does not have a similar law.

3.  Are the Fannie Mae mortgage requirements about owner-occupancy the main reason your HOA is rejecting leases? 

If the rental cap has been met but there is further demand by owners, make sure the Board knows that FNMA expanded the allowable percentage of rentals over the past few years.   And even if the condo’s leasing percentage is too high under current guidelines, it is possible to get a waiver.   The key is to find a loan officer willing to apply for a waiver through the FNMA Project Eligibility Review Service (PERS).  You can find more info here.  Also, the highly-desirable FHA loans require an owner-occupancy rate of only 51%.

4.  File a lawsuit against the HOA

This step should never be undertaken lightly.  People who use their homeowner association are essentially suing their neighbors and themselves.  Lawsuits consume cash at an alarming rate and often destroy goodwill in the neighborhood, regardless of who wins.  You should also know that the odds are heavily tilted in favor of the HOA.  The law gives considerable discretion to the HOA Board and its decisions are presumed valid until proven otherwise.

5.  Find a fatal flaw in the amendment process that passed the rental restriction

This route is discussed in the article “HOA Rental Policies – Procedural Flaws That Matter.”