Articles

LAYING DOWN THE LAW
with
Christopher J. Charles, Esq. and David F. Kotter

Are Nonrecourse Loans Feasible?

At first blush, asking a lender for nonrecourse financing seems like someone asking for your first-born child – weird and awkward. But in today’s economic and real estate climate, under the right conditions, nonrecourse loans can make sense.

Practically speaking, most commercial loans are essentially “full recourse,” which means that because many lenders insist on personal guaranties, the guarantors are personally liable for the loan balance – meaning if the borrower defaults, the lender can sue the guarantor (and the borrower in some cases) for the unpaid balance, plus interest, and attorneys’ fees.  And the lender can pursue collection against the guarantor’s non-exempt assets, which typically includes bank accounts, wages, stocks, bonds, automobiles, and of course, real estate. Read More

LAYING DOWN THE LAW
with
Christopher J. Charles, Esq. and Philip A. Overcash, Esq.

Legal Headaches: Can Tenants Sue Their Landlord for Annoyance or Emotional Distress Concerning a Property’s Condition?
The Arizona Residential Landlord and Tenant Act, A.R.S. § 33–1301 et seq., (the “Act”), provides a comprehensive framework regulating the rights and responsibilities of landlords and tenants under a lease for residential properties. Arizona courts have interpreted the Act to provide broad protections to tenants, as well as a wide array of damages which the tenant may recover when the landlord breaches the lease.

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“Where there are no oxen, the manger is clean, but an abundant harvest comes through the strength of the ox.” Proverbs 14:4. Put another way, if you don’t do any work, you might have a clean stable, but you won’t have any crops. Applying this principal to business, if you are involved with enough real estate deals in this litigious culture, sooner or later, you are bound to run into a dispute. Common real estate disputes include failure to close, lack of proper disclosure, title issues, and other issues concerning the property’s condition. Resolving disputes through the courts is often costly and inefficient.   Read More

Pigs get fat and hogs get slaughtered. That is why hard-money lenders should avoid seeking hyper aggressive interest rates. Although conventional mortgage interest rates remain historically low, interest rates on private loans, or “hard money” loans range anywhere from 5% to multiples of the principal amount. But if lenders overreach, they may end up forfeiting all interest. Indeed, the defenses of usury and unconscionability are alive and well. Read More

COURT RULES THAT JUDGMENTS DO NOT ATTACH AS LIENS TO HOMESTEAD PROPERTIES

Most civil cases never reach the trial stage.  Instead, they are settled before trial.  However, in those smaller percentage of cases that proceed all the way to trial, the Court will award to the prevailing party a judgment.  These judgments are typically recorded with the local county recorder’s office so that the judgment can attach as a “judgment-lien” on any non-exempt property owned by the debtor. Read More

One of the greatest misconceptions of Arizona law is that usury is no longer a viable cause of action. In the 1980s, Arizona amended the usury laws to remove the interest rate ceiling.  As a result, today’s usury laws essentially authorize lenders to contract for any interest rate. However, usury remains a viable defense against lenders who breach their own contracts by charging fees that aren’t allowed. Read More

Separation Agreements (A.R.S. § 25-317)

Sometimes married couples decide to separate, either in anticipation of divorce, giving one or both of the parties “some space,” or simply living separately for a while in hopes of sorting out their feelings and possibly reconciling.  Under Arizona law, married couples can remain married but enter into a legal contract governing their financial matters – the handling of property, debt or even support.  This is called a separation agreement and is controlled by A.R.S. § 25-317.   The Court of Appeals recently ruled that per the statute, for these separation agreements to be enforceable, the terms cannot be unfair.  Buckholtz v. Buckholtz, No. 1 CA-CV 17-0596 FC, filed January 15, 2019. Read More