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Category: Florida Real Estate Law

Foreign National Seller of Florida Real Property- FIRPTA Withholding FAQ’s!

Posted on by ~Gulati Law~

If you are a foreign national or you are assisting a foreign national client in selling real estate, you are most likely familiar with Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”).  When you are handling a real estate transaction involving a foreign seller, depending on the value of the property and how it will be used, the transaction is generally subject to a 15% withholding on the purchase price due to FIRPTA.   The Act places the responsibility of the Buyer for this withholding.

For the purposes of FIRPTA, a foreign seller is defined as either a non-resident alien individual, a foreign corporation not treated as a domestic corporation, or a foreign partnership, trust or estate.  A person is considered to be a resident alien under FIRPTA if they have legal permanent resident status in the U.S. (they have a Green Card), and they meet the substantial presence test which sets a minimum number of days they must be physically present in the United States.  

The formula for the substantial presence test is as follows:

  • 31 days during the current year;
    PLUS
  • 183 days during 3-year period
    • All the days present in the current year, &
    • 1/3 of the days present in the first year prior, &
    • 1/6 days present in the second year prior.

If you are buying or selling a property, and the Seller is a foreign national, it is highly recommended that you obtain legal counsel to guide you through the complex particulars and ensure that the financial obligation you are about to embark on is drafted specific to your needs and in your interest. For any questions or assistance, please contact us as we would be happy to guide you.

Florida Amended Lease Requirements- Bill Signed into Law!

Posted on by ~Gulati Law~

At the begining of the year, the Florida legislature passed a bill amending Florida Statutes § 689.01 which eliminated the requirement of having two witnesses for the execution of a lease on real property.


On June 27, 2020, Governor De Santis signed this bill into law. Until such time, Florida law has clearly stated that a lease for a term of more than one year could be created only by an instrument in writing signed in the presence of two subscribing witnesses.

Under the new amended law, which is now in effect, no subscribing witnesses will be required for leases of real property in Florida.

As a firm who has assisted both Landlords and Tenants in drafting and reviewing commercial and residential leases, we pride ourselves on keeping current with changing requirements and ensuring that no Landlord or Tenant is left executing a lease which is unclear or subject to contesting. 

Should you find yourself entering into a lease, whether commercial or residential, it is highly recommended that you obtain legal counsel to guide you through the complex particulars and ensure that the financial obligation you are about to embark on is drafted specific to your needs and in your interest. For any questions or assistance, please contact us as we would be happy to guide you.

Business legal document concept : Pen and glasses on a lease agreement form. Lease agreement is a contract between a lessor and a lessee that allow lessee rights to use of a property owned by lessor

BUSINESS LOAN OPTIONS FOR FINANCIAL RELIEF RESULTING FROM COVID-19/CORONAVIRUS

Posted on by ~Gulati Law~

The Coronavirus pandemic has caused many businesses to experience severe income loss, many already unable to cover their bottom-line business expenses. As a result, our firm has begun actively working with clients applying for economic disaster loans. Please reach out to us immediately for help in preparing your application as deadlines are quickly approaching.  Due to the urgency and time sensitivity of these applications, we are making these are highest priority.

Below is a list of the business loans that may be available to you (on a case by case basis): 

FLORIDA SMALL BUSINESS EMERGENCY BRIDGE LOAN

  • Purpose: Designed to “bridge the gap” between the disaster occurrence and when the business secures long term recovery resources
  • Amount: Up to $50,000.00 per small business (up to $100,000.00 in some occasions)
  • Term: Requires repayment within 12 months
  • Interest: 0% for the first 12 months after which interest is charged at 12%
  • Eligibility:
    • Florida must be the designated disaster area
    • Must maintain a place of business in Florida and established prior to March 9, 2020
    • Demonstration of economic injury as a result of Coronavirus
    • Individual or individual who owns at least 51% equity of entity
    • At least 2-100 employees**
  • Use: Proceeds MUST be used for maintaining or restating business (use of proceeds to pay off debts already incurred on case by case basis)
  • Supporting Documentation Required:
    • Government ID          
    • Federal Business tax returns for the last 2 completed years
    • Employer tax documentation.
    • Personal tax returns for the last 2 completed years with attached Schedule C
    • Additional information that the applicant believes would assist the Loan Review Committee in making its decision (such as a loan summary).
  • Application Deadline: May 8, 2020 – Website: https://floridadisaster.biz/

FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY-THE REBUILD FLORIDA BUSINESS LOAN FUND

  • Amount: Up to $500,000.00 in state and federal funds ($40,000,000.00 available)
  • Term: Case by case basis
  • Interest: Market interest rates
  • Eligibility:
    • Existing and new businesses that were impacted directly or indirectly by a disaster to rebuild and expand
    • Industries identified by the state as key strategic markets for future growth and will focus on creating and enhancing the diversification and resiliency of Florida’s economy
  • Use: Inventory purchases, construction or renovation, working capital needs, capital start-up loans, machinery and equipment purchases, equipment financing

SBA FEDERAL ECONOMIC INJURY DISASTER LOAN (EIDL)

  • Amount: Up to $2,000,000.00 in assistance available (determined on a case by case basis but may not exceed what the applicant could have paid had the disaster not occurred)
  • Term: long term prepayment up to 30 years
  • Interest: 3.75% for small businesses; 2.75% for non-profits
  • Eligibility:
    • Must have less than 500 employees
    • Physical presence in the disaster area
    • Substantial economic injury
    • Applicant’s credit history
    • Financial position of the business (must be able to repay loan)
    • Business’s potential to accumulate funds necessary to operate
    • Estimated loss incurred or that will be incurred
    • Businesses with credit available elsewhere are not eligible (This may be removed by approved CARE Act)
    • Must have collateral for loans over $25,000
    • Ineligible: Agricultural, religious, charitable, gambling, unclear about cannabis industry
  • Use: Proceeds MUST be used to pay fixed debts, payroll, accounts payable, and other bills that are unable to be paid as a result of Coronavirus impact
    • Cannot be Used To: Refinance debt incurred prior to disaster; Service current SBA loans, Pay directly or indirectly any obligation of tax or non-tax penalty due to a violation; Pay dividends or disbursements to owners except for reasonable remuneration directly related to performance of services for the applicant business
  • Step: (1) Apply via SBA website; (2) Review, verification and processing; (3) Loan closing and disbursement
  • Supporting Documents Required:
    • Online SBA Application – Form 5 – To be completed online (Registration required)
    • IRS Form 4506T- Tax Transcript authorization for tax verification
    • Copy of most recently filed tax return
    • Personal financial statements for all owners of 20% or greater ownership interest – SBA Form 413
    • Schedule of liabilities – SBA Form 220
    • Current year to date profit and loss statement
  • Disbursement: Initial disbursement within 5 days after approval (approval usually takes 3-4 weeks but could be more given the extent of the pandemic)
  • Application: Within 9 months of state of disaster declaration

SMALL BUSINESS ASSOCIATION 7(A) (Loans given not specifically as a result of Coronavirus)

  • Amount: Maximum of $5,000,000.00
  • Term: Maximum of 25 years
  • Maximum Guarantee: 85% for loans up to $150,00.000 and 75% for loans greater than $150,000.00
  • Interest: Negotiable
  • Eligibility: Case by case basis.

CARES ACT (initial proposal-not yet approved)

  • EIDL CHANGES:
    • Extension of EIDL Loan availability to $10 Billion.  
    • Waiver: Creates waiver of personal guarantee for loans of less than $200,000.00
    • Emergency Grant: Creates emergency grants of $10,000.00 to be distributed by SBA within 3 days while an application is pending. No repayment even if denied EIDL loan.
    • Eligibility:
      • Nonprofits with fewer than 500 employees
        • Business must be in operation on March 1, 2020 and had employees for which it paid salaries and payroll taxes
    • Basis is only on credit score
    • Use: Proceeds MUST be used for working capital, payroll support, salaries, mortgage payments, rent, utilities, and certain other existing debt obligations
  • SMALL BUSINESS INTERRUPTION LOAN PROGRAM
    • Purpose: to cover the period of time from March 1, 2020 to December 31, 2020. Designed to ensure employees are paid even as their employer’s business is currently closed
    • Amount: Government to make available $350,000,000,000.00 in guarantees to obtain loans to cover expenses during Coronavirus Pandemic. Maximum to business is an amount equal to 4 times the borrower’s total monthly expenses (monthly average over last 12 months) capped at 10 million
      • Expenses include payroll, mortgage, rent, payments on other debt obligations
    • Interest: No more than 4%
    • Waiver of Fees: SBA to waive all applicable fees.
    • Deferment: Lenders required to defer payments for not less than 6 months
    • Loan Forgiveness: Equal to the costs incurred or payments made by borrower during an 8-week period after the origination date of the loan including:
      • Payroll costs
      • Interest payments on any mortgage (existing prior to Feb 15, 2020)
      • Rent payments (after Feb 15, 2020)
      • Utility service payments (service began before Feb 15, 2020)
      • Forgiveness reduced by reduction in employees or reduction in employee pay greater than 25%
      • Borrower will not be penalized for reduced payroll if borrower rehires workers previously laid off (unclear as to time limits)
    • Eligibility:
      • No more than 500 employees (applies per physical location unless gross receipts exceeds $500,000,000.00) Standard cannot be more than 500 employees in the aggregate of all affiliates.
      • Cannot be receiving other assistance related to the Coronavirus Pandemic, any pending application will eliminate availability of SBIL
      • Not limited by geography or to states that have been declared as disaster areas
    • Use: Paid sick leave, group health care benefits, employee salaries, mortgage payments, rents, utilities, payment of other debt obligations.
    • Application: Accepted through SBA qualified lenders
  • EXPANSION OF SBA EXPRESS LOAN PROGRAM
    • Approval or denial within 36 hours
    • Can be a term loan or line of credit
    • Amount: Maximum of $350,000.00 to be increased to $1,000,000.00 then reduced to $500,000.00 after December 31, 2020
  • EXPANSION OF MICROLOAN PROGRAM
    • Loans up to $50,000.00 made through nonprofit lending organizations directed to underserved market applicants
    • Average loan size of $14,000.00
  • SBA LOAN DEFERMENT FOR EXISTING LOANS
    • Secondary Market Loans: Up to 6 months
    • Loans Not Sold on Secondary Market: Lender can use the Colsons Customer Service Online Request for deferral of less than or equal to 12 months, including lender notification of unilateral 3-month deferral
    • SBA 504 Loans: The amount deferred should not exceed 6 cumulative monthly payments or 20% of original loan amount whichever is less         
    • Borrower financial info will be reviewed prior to deferral to ensure cash flow problems are not long term
    • If loan is more than 60 calendar days past due and problems appear long term deferral will not be granted
    • Interest will continue to accrue during deferment period with payments optional
  • FEDERAL RESERVE-MAIN STREET BUSINESS LOANS
    • Details not yet available but will be a direct lending program from the federal reserve to businesses

FL DEPT OF ECONOMIC OPPORTUNITY-SHORT TIME COMPENSATION PROGRAM

  • Term: 12 calendar months
  • Eligibility:
    • The employer must describe a plan for giving notice, if feasible, to an employee whose workweek is to be reduced, together with an estimate of the number of layoffs that would have occurred absent the ability to participate in STC.
    • Participating employees must be full-time (at least 32 hours per week prior to Short Time Compensation reduction), permanent employees (not seasonal) and the employees must have a set number of hours (excluding overtime) that they work each week in order to participate. Employees paid piece rate, on commission, or who are hired to do certain jobs regardless of the time required are not eligible for participation.
    • Short Time Compensation benefits are payable when normal hours of work are reduced from 10-40 percent. If normal work hours exceed 40, the percentage will be based on 40 hours.
    • Each week that Short Time Compensation benefits are claimed, at least 10 percent of the employees from the total staff or within a particular unit must be working reduced hours. (Two employees is the minimum for a staff or unit of less than 20 employees.)
  • Use: to retain employees during a temporary slowdown, avoid the expense of recruiting, hiring, and retraining new works when business resumes, a transition to layoff
  • Application: Requires log in.

FACEBOOK SMALL BUSINESS GRANTS PROGRAM

  • Amount: $100,000,000.00 in cash grants and AD credits determined on a case by base basis
  • Eligibility: Details to come
  • Use: Proceeds may be used to assist with rent, keep workforce, connect with more customers, and cover operational costs.
  • Application not out yet, can sign up on https://www.facebook.com/business/boost/grants?ref=eml to obtain updates

STATE BANK OF INDIA

  • Emergency Credit for existing Borrowers affected by the Coronavirus outbreak
  • Amount: up to ₹ 200 crore or 10% of existing fund based on working capital limits
  • Term: 12 months
  • Interest: 7.25%
  • Eligibility:
    • Current standard account
    • Account not classified as SMA 1 or 2 as of March 16, 2020
  • Deadline: June 30, 2020

Please note many of the loan options above are provided on a case by case basis and are not set in stone, as they are changing depending on what is available, and the laws being enacted. It is important you understand your options and the loan terms being offered during this period.

We are immediately available to assist you through the application process, contact Gulati Law at 407-900-5054 to get started immediately. We recommend getting your applications in as soon as possible as processing can take weeks. 

Handling Your Hotel Loans Amid the Coronavirus Pandemic

Posted on by ~Gulati Law~

With the sudden arrival of the Coronavirus Pandemic, the hospitality industry has been hit hard. Between the fear, anxiety and social isolation of consumers and the government ordered lockdowns and no travel orders, occupancy of many hotels is down to an alarming level. It is anticipated, by the American Hotel & Lodging Association that more than half of U.S. Hotels may close before the end of 2020.

How will Lender’s respond to the crisis?

Unfortunately, we cannot predict how the Banks are going to be responding to the sudden and severe financial distress of their Hotelier Borrowers. Unless your loan agreement, note, and mortgage specifically includes a force majeure clause or a similar clause including a viral pandemic (see Gulati Law Blog Coronavirus and How it Affects your Contracts) providing some type of cure, then the Lender has the right to default you and pursue all legal remedies including acceleration of the debt and foreclosure of the property.

What Can I do to Get Ahead of the Crisis?

It is important not to wait until you receive a notice of default to take action. Reaching out to your Lender in anticipation of default is vital to reaching a resolution. Gulati Law has trained attorneys who are able to reach out to your lender to discuss forbearance, deferment of payments, or other solutions that work for both you and your lender.

Is Refinancing an Option?

Even before the start of the pandemic, mortgage loan interest rates had been at an all time low. It is the hope of the industry that these will stay low or continue to fall leaving an opportunity for hotel owners to refinance their existing loans. It is of the utmost important to have a qualified attorney review any refinance documents prior to execution. Gulati law has been successful in negotiating refinances with the best terms for our clients and can close all loans in house.

In addition to the option of refinancing, there may be other options as Congress convened over the weekend to discuss legislation intended to provide stimulus for the American economy, called the CARES Act. Stay tuned for more updates on this proposed Act.

 Information Needed Prior to Reaching out to the Lender

  1. Actual Borrower Name, any Guarantor Names, Property Address and ID Number;
  2. History of good payments;
  3. Positive stories about the quality of your hotel and customer service;
  4. Occupancy issues and other current financial strains; and
  5. Possible financial payments you CAN make (if any) until the economy recovers.

Contact Gulati Law, P.L. for Assistance

We cannot reiterate enough that you should contact a qualified attorney to correspond with your lender on your behalf. Contact our office today to discuss retaining our services immediately (initial letters to your Lender may be complimentary on a case by case basis).

Remember to stay positive! We believe that once this crisis passes, we will be stronger than before!

Sources: Congress.gov, AHLA, AAHOA, Hospitality Mgmt

Coronavirus and How it Affects your Contracts!

Posted on by ~Gulati Law~

As the number of Coronavirus (COVID-19) cases in the United States and Internationally continues to rise, many business owners are feeling the effects of quarantines, social distancing, travel bans, and more. In the short amount of time since the virus has emerged, businesses, especially in the hospitality and service industries, have experienced significant and devastating disruption.

What is a Force Majeure Clause?

A Force Majeure clause is a provision in a contract that allows for a party to suspend or terminate the performance of its obligations when certain circumstances beyond their control arise, making performance inadvisable, commercially impracticable, illegal, or impossible.

Examples of Force Majeure events include war, riots, fire, flood, hurricane, typhoon, earthquake, lightning, explosion, strikes, lockouts, slowdowns, prolonged shortage of energy supplies, and acts of state or governmental action prohibiting or impeding any party from performing its respective obligations.

Force majeure clauses must be clearly stated in the Contract and are interpreted strictly.

Is Coronavirus a Force Majeure Event?

The severe disruption to businesses around the world, resulting from the effects of Coronavirus (both physical and emotional), are clearly affecting business owner’s ability to function in the declining economy.  In approaching business operations and all the contracts that accompany the same, you may be wondering “can I get a break” and the Force Majeure clause may be the way to get just that. While unfortunately Coronavirus is not likely to be specifically stated in your clause, as it is a world event unanticipated in our lifetime, it can most certainly be argued that, depending on the business sector, the response to the Coronavirus (such as mandatory lockdowns, social distancing, and business closures) are in fact acts of government which are impeding a party from performing its respective obligations. It may not fully excuse non-performance or cancel existing contracts, but in some cases may defer or alter the terms.

What Does this Mean for Me?

For these reasons it is vital that business owners carefully review the language of their agreements, and not simply choose not to perform and expect to escape without consequences.  In entering this uncharted territory of business operations in a consumer panicked society, it is important the business leaders in the industry stay calm and solution oriented by doing the following:

Detailed Review – Review every contract you have that requires some form of fulfillment of goods or services, or some sort of financial action or commitment over the next 6 months.

Be Proactive – Reach out to your business contacts regarding the impact of the Coronavirus. It is likely that they too have felt the effects and discussing how to mitigation potential damages is valuable to all parties.

Modify your Clause – Whilst the world hopes that we never see another pandemic as tragic as Coronavirus, this should be a wakeup call for all contract participants to ensure that the Force Majeure clause is included in every contract and shall include the extreme scenarios.

Retain Legal Assistance – If you, your business, your real estate, or your pending construction is at risk, contact Gulati Law to discuss your options. As a firm with vast experience dealing with contract delays, performance challenges, payment concerns and force majeure clauses we have the skills to assist you through this difficult time and preserve your current relationships. Most importantly stay safe!

Hotel Investor’s Number One Question in Today’s Market!

Posted on by ~Gulati Law~

We have had a strong decade of growth in the Hospitality Industry, however, the number one question we get from Hotel Investors in Florida is- are we approaching the next great recession?

“Both Hotel ADR* and RevPAR* Growth Trends are starting to slow down, which could indicate a stabilization in the hotel economy. This notion aligns with a survey conducted by Marcus & Millichap Research Services, where it was concluded that hotel investors expect stabilized hotel property values soon.”

Moving forward, hotel investors must be cautious and astute in preparing their investments and maintaining adequate reserves in the event of a recession.

Contact us today with your Florida Real Estate Hospitality questions. Attorney Gulati of Gulati Law is Certified in Hotel Industry Analytics (CHIA designation) and deals with Hotel transactions within the Firm.

*ADR: Commonly referred to as Average Daily Rate is a statistical unit that is often used in the lodging industry.

*RevPAR: Commonly referred to as Revenue per available room which is a performance metric used in the hotel industry.

Sources: Marcus & Millichap Research Services, BEA, BLS, U.S. Census Bureau, Federal Reserve, STR, Inc

Service Animals and the ADA!

Posted on by ~Gulati Law~

Under the Americans with Disabilities Act (“ADA”), a “service animal” is only a dog that is individually trained, works or performs tasks for individuals with physical, sensory, psychiatric, intellectual or other mental disabilities. The task(s) performed by the dog must be directly related to the person’s disability.

It is important for the hospitality industry to understand what qualifies are a service animal under the ADA. The ADA does not recognize comfort animals, therapy animals, or companion animals. An animal whose sole function is to provide therapy is not a “service animal” under ADA.

How to verify?

In situations where it is not obvious that the dog is a service animal, staff may ask only two specific questions: (1) is the dog a service animal required because of a disability? and (2) what work or task has the dog been trained to perform? Staff are not allowed to request any documentation for the dog, require that the dog demonstrate its task, or inquire about the nature of the person’s disability.

The ADA requires that service animals be under the control of the handler at all times. In most instances, the handler will be the individual with a disability or a third party who accompanies the individual with a disability. The service animal must be harnessed, leashed, or tethered while in public places unless these devices interfere with the service animal’s work or the person’s disability prevents use of these devices. In that case, the person must use voice, signal, or other effective means to maintain control of the animal.

For example, a person who uses a wheelchair may use a long, retractable leash to allow her service animal to pick up or retrieve items. She may not allow the dog to wander away from her and must maintain control of the dog, even if it is retrieving an item at a distance from her. Or, a returning veteran who has PTSD and has great difficulty entering unfamiliar spaces may have a dog that is trained to enter a space, check to see that no threats are there, and come back and signal that it is safe to enter. The dog must be off leash to do its job, but may be leashed at other times. Under control also means that a service animal should not be allowed to bark repeatedly in a lecture hall, theater, library, or other quiet place. However, if a dog barks just once, or barks because someone has provoked it, this would not mean that the dog is out of control.

There are specific rules under the ADA that are tailored specifically to hoteliers and public service accommodations. Please contact us, your business law attorneys for more information. Staying informed helps limit ingenuine service animals and support and welcome your guests and comply with ADA.

Source: ADA

1031 Like Kind Exchange Tips

Posted on by ~Gulati Law~

1031 Like Kind Exchange Tips -Identifiying Properties 

With Real Estate being so hot, we have seen such an increase in 1031 Like Kind Exchange’s in the past few years.

Here are a few tips to consider when thinking about doing the exchange:

The Basic 1031 Identification Rule Is:
The Exchanger has only 45 days from the day of closing on its relinquished property to identify possible replacement property.

WARNING: Section 1031 and the IRS regulations thereunder have strict requirements for the identification of replacement property.

Identification of all replacement property must be made in writing, must be signed by the Exchanger, and must be delivered to the Qualified Intermediary on or before midnight of the 45th day.

The Exchanger may identify any type of investment or business real property in the USA, including a single-family rental, apartment building, hotel, office building, warehouse, vacant land, shopping center, etc.

The Exchanger/Taxpayer may not identify replacement property or amend its identification after the 45th day has expired.

Identifying Multiple Properties:

The Exchanger may identify more than one property, as follows:

(1) The Exchanger may identify as many as three (3) properties, regardless of their total value (known as the “3-Property Rule”) See Example # 1 below; OR

(2) The Exchanger may identify any number of properties provided their aggregate fair market value on the 45th day does not exceed 200% of the aggregate fair market value of all of the Exchanger’s relinquished property on the date of its transfer (known as the “200% Rule”) See Example #2 below; OR

(3) The Exchanger may receive, by the end of the Exchange Period, Replacement Property which the Fair Market Value of, is at least 95% of the aggregate Fair Market Value of all of the Replacement properties identified (known as the” 95% Rule”) See Example #3 below.

“The Exchanger is not required to acquire all the property it has have identified. Therefore, many gurus in our industry recommend that the Exchanger identify alternative properties should the closing on the Exchanger’s preferred property fail for any reason. Any property acquired prior to the 45-day Exchanger’s identification expiring, counts as an identified property.”

EXAMPLE #1 – 1—3 PROPERTY RULE:
Mr. and Mrs. Trembling (Exchangers) sell their investment property that they have owned for 17 years for the sum of $695,000.00. They, within 45 days of the relinquished transaction, e-mail to their Qualified Intermediary a list of three (3) properties for the following amounts: Property # 1: $1,200,000.00; Property #2: $500,000.00; Property # 3; $400,000.00.

As long as the Exchangers purchase property of equal or more value than their relinquished property ($695,000.00) any tax they may have owed will be deferred. There is NO dollar amount limitation on the properties they have identified. The only limitation they have using this rule is that they can only identify 3 properties.

EXAMPLE #2 – 200% RULE:
Mr. and Mrs. Anderson (Exchangers) sell their investment property that they have owned for 3.5 years for the sum of $500,000.00. Within the 45-day time limit, they e-mail to their Qualified Intermediary, the following list of possible Replacement Properties: #1: $150,000.00; #2: $300,000.00; #3: $250,000.00; #4: $100,000.00; and #5: $199,000.00.

The Exchangers are allowed to identify any number of properties, but they cannot total together more than 200% of what they sold.

The 5 properties they identified combined total: $999,000.00, which is under the $1,000,000.00) they would be allowed to identify and therefore their Identification is valid. They do not have to purchase all of these properties, but if they want to defer all of their gains, they must obtain at least $500,000.00 of replacement property.

EXAMPLE #3 – 95% RULE:
Mr. Thomas Franklin (Exchnager) sells his investment property for the tidy sum of $800,000. He identifies the following properties as possible replacement properties: #1: $600,000; #2:$ 300,000; #3: 900,000; #4: 700,000 and #5: $200,000.

The total valuation of all the properties together is: $2,700,000.

He cannot use the 200% rule because he has identified more than 200% of his relinquished property’s selling price ($800,000 x 200% = $1,600,000). But he can still use the 95% rule. He must purchase 95% of the valuation price of the properties he identified. That would be: $2,565,000 ($2,700,000 x 95% = $2,565,000). If he purchases less than the 95%, his 1031 exchange will be disqualified.

After reviewing the above 3 Rules for Identification, most Exchangers select the 3 Property rule, because it is a lot easier. It has no dollar amount restrictions, but the exchanger is limited to only 3 properties for identification purposes.

Source: Stephen Wayner of Liberty 1031.

DISCLAIMER: We always recommend that the taxpayer consults with their tax and/or legal counsel on all matters dealing with the Internal Revenue Serice.

Post-Hurricane Scams Targeting Real Estate Owners!

Posted on by ~Gulati Law~

ATTENTION all Real Estate Owners!

BEWARE OF SCAMMERS
There have been talks of some individuals attempting to take advantage of real estate owners post-hurricane recovery situations. Insurance, debris removal, and tree removal scammers are actively working in storm affected areas.

Do not sign anything regarding an “assignment of benefits” from a potential contractor.

If you have any questions regarding reviewing paperwork to be signed, please reach out to your Real Estate or Business Law Attorney.

 

#GulatiLaw

Big Moves in the Hotel Industry

Posted on by ~Gulati Law~

Marriott plans to remove plastic straws Worldwide by July 2019!

Marriott International today announced that it has adopted a plan to remove disposable plastic straws and plastic stirrers from its managed and franchised properties by July 2019. The move will impact 6,500 properties across 30 brands around the world, and could eliminate the use of more than 1 billion plastic straws per year and about a quarter billion stirrers. The company says that its timeline gives hotel owners and franchisees time to deplete their existing supply of plastic straws, identify sources of alternate straws (which hotels will offer upon request), and educate staff to modify customer service.

Here are Gulati Law we strive to protect our enviroment, and are also following the same plan.

Not so Fun Fact: According to Google, over 100 million marine animals are killed each year due to plastic debris in the ocean. Currently, it is estimated that there are 100 million tons of plastic in oceans around the world.

#GoGreen #SavethePlanet

Source

Contact Us Today!

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