In California Supreme Court Decision Changes the Transfer Tax World, Pillsbury attorneys Craig Becker, Richard Nielsen, Breann Robowski and Dianne Sweeney discuss the California Supreme Court’s decision in 926 North Armore Avenue, LLC v. County of Los Angeles:
In their recent client alert “CFIUS and Real Estate,” colleagues Nancy A. Fischer, Jenny Y. Liu, Matthew R. Rabinowitz examine how an influx of foreign investments in U.S. real estate has led three key U.S. Senators to request a review of how the Committee on Foreign Investment in the United States (CFIUS) examines real estate transactions.
Today, the U.S. Supreme Court held that there was no compensable taking of Petitioners’ property in Murr v. Wisconsin. Petitioners who own two adjacent lots along a waterfront in Wisconsin were not deprived of all economically beneficial use of their property. A formalistic approach to the issue was rejected. Instead of relying solely on lot lines, the Court considered fairness and factual analysis, noting its regulatory takings jurisprudence is based on flexibility.
The real estate industry is frequently identified as one of the most likely early adopters of blockchain technology and smart contracts. However, industry participants remain skeptical as to the timing and magnitude of the expected changes. That is understandable given the close association of blockchain technology with bitcoin controversies, other virtual currencies and some questionable crowdfunding ventures. Moreover, it is an emerging technology that includes confusing public, private and hybrid versions and involves imprecise terminology and standards. And smart contracts, which pre-date bitcoin, are still misunderstood and mistrusted.
As Los Angeles continues to struggle with lagging development pace as compared to the national pace of housing creation, communities across the city grapple with the potential implications of permitting increased density. The dueling priorities of providing much-needed housing in one of the nation’s fastest-growing markets and maintaining neighborhood history and character continue to square off as the city assesses development across its many communities.
Almost 18 months after it was introduced, the San Francisco Board of Supervisors recently approved Ordinance 150969, which creates development bonuses for private development projects where at least 30% of the units are subject to affordability restrictions. Known as the HOME-SF Program, the legislation allows qualifying projects to exceed otherwise applicable height restrictions by up to 20 feet and allows developers to select three additional zoning modifications from a menu of options, which includes reductions in required rear-yard setbacks and modifications to parking, exposure, and open space requirements. HOME-SF projects must also include on-site family-friendly amenities, such as dedicated bicycle parking and stroller storage, open space, and yard dedicated for use by children.
Most construction loans contemplate multiple advances or disbursements of funds at various stages of the construction project. The construction loan agreement will set forth the conditions that the borrower must satisfy to receive each advance of funds. Given that a construction loan concerns an active construction project, there is a risk that a lender could lose its lien priority in an advance (secured by the insured mortgage) to a mechanic’s lien. This post addresses how a title insurance policy and endorsements can insure against such a risk. Continue Reading ›
Climatologists predict that sea levels will continue to rise in the coming years and that temperatures will increase, causing the frequency and intensity of hurricane-like storms to grow. These scenarios present challenges for waterfront buildings and residences—both existing and new construction.
New properties are still being built along coastal areas. Some developers are marketing homes and buildings that are designed to withstand major storms. Property owners are taking costly measures to protect existing properties. In fact, in the wake of Superstorm Sandy, numerous companies now offer various flood protection measures for both residential and commercial buildings, such as paneling, barrier systems, gates, removable stop logs and raised foundations. Continue Reading ›
I recently wrote here about the use of UPREITs, a form of real estate partnership combined with a real estate investment trust, to create liquidity for high net worth real estate investors while allowing them to defer taxable gains on highly leveraged and appreciated real property.
Another tax deferral strategy that’s growing in popularity again because of higher tax rates is the use of 1031 exchanges. Named after the Internal Revenue Code section authorizing these transactions, they are also known as “like-kind” exchanges.
There are two reasons why borrowing has become the tax-preferred method of financing a sophisticated real estate investment portfolio.
First is the ability to finance improvements with debt, which offers depreciation deductions. Second is the ability to make leveraged distributions through refinancing without paying immediate tax on the proceeds. The tax basis of assets steps up to fair market value at the time of the holder’s death, eliminating the deferred gain, so the income tax deferral upon a refinancing is even more attractive for heirs.
Gravel2Gavel Construction & Real Estate Law Blog