Common Escalation Structures

• Fixed percentage increases — rent increases by a set percentage annually (commonly 2-4%) or at defined intervals, providing predictability for both parties
• Fixed dollar increases — rent increases by a specific dollar amount per square foot at set points in the lease term
• Index-based increases — tied to a published index, most commonly the Consumer Price Index (CPI), meaning rent increases track inflation rather than a predetermined fixed rate
• Fair market value resets — typically used at renewal rather than during the initial term, resetting rent to current market rates

Why the Structure Matters More Than It Appears

A 3% fixed annual increase and a CPI-indexed increase might look similar at signing, but they behave very differently depending on economic conditions — a fixed increase provides certainty regardless of inflation, while a CPI-indexed increase could result in a lower cost during low-inflation periods, or a significantly higher cost during high-inflation periods, with no cap unless one is specifically negotiated.

Negotiating Caps on Index-Based Escalations

For tenants accepting CPI-based escalation, negotiating a cap (a maximum percentage increase regardless of what the index shows) and sometimes a floor (a minimum increase, which landlords often push for in exchange) provides a meaningful degree of protection against unpredictable inflation spikes, while still tying rent to actual economic conditions.

Compounding Over a Long Term

Escalation structures compound significantly over longer lease terms — the difference between a 2% and a 4% annual fixed escalation, for example, becomes substantial by year seven or eight of a ten-year lease. Tenants negotiating longer-term leases should model out the actual dollar impact of proposed escalation terms across the full term, not just evaluate the initial percentage in isolation.

Escalations and Percentage Rent

For retail tenants also paying percentage rent, base rent escalations directly affect the natural breakpoint calculation — an increasing base rent generally raises the breakpoint as well, meaning the tenant reaches the percentage rent threshold later each year as base rent climbs, an interaction worth understanding when evaluating the overall economics of a percentage rent lease over time.

Escalations in NNN Leases

In a triple net lease structure, base rent escalations are separate from — and in addition to — any increases in the pass-through NNN charges (taxes, insurance, CAM), meaning total occupancy cost can rise from two independent directions simultaneously. Tenants should evaluate escalation risk across both categories together, not just the base rent escalation in isolation.

Negotiating From a Position of Informed Comparison

Escalation terms are more effectively negotiated with market comparables in hand — understanding what escalation structures are typical for similar properties and lease terms in the relevant Florida market gives a tenant a realistic basis for pushing back on above-market escalation terms, rather than negotiating in the abstract.

Negotiating a multi-year commercial lease and want to understand the true long-term cost of proposed rent escalations? Brent A. Levison, P.A. has over 25 years of experience negotiating commercial lease economics for tenants across Florida. Contact the firm today for a consultation.

The information in this article is provided for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please consult a qualified attorney.

The post How to Negotiate Rent Escalations in a Commercial Lease first appeared on Brent Levison.

What “Triple Net” Actually Means

In a triple net lease, the tenant pays base rent plus their proportional share of the three major categories of property expense:

1. Property taxes
2. Property insurance
3. Common area maintenance (CAM), including repairs and upkeep of the building and common areas

This is distinct from a full-service gross lease, where these costs are bundled into a single rent figure the landlord is responsible for covering.

Why Landlords Prefer NNN Structures

A triple net structure shifts variable cost risk from the landlord to the tenant — if property taxes, insurance, or maintenance costs rise, the increase passes directly through to the tenant rather than eroding the landlord’s return. This is a significant reason NNN has become the dominant structure in much of retail and single-tenant commercial real estate.

Comparing Quoted Rent Across Lease Types

One of the most common mistakes tenants make when comparing spaces is comparing a NNN quoted rent directly against a gross lease quoted rent without accounting for the additional NNN charges — a lower NNN base rent can easily end up costing more overall once taxes, insurance, and CAM are added, compared to a higher quoted gross rent that already includes those costs.

What to Review Before Signing an NNN Lease

• Historical NNN charges for the property, not just projected or estimated figures, to understand the real total occupancy cost
• Whether a CAM cap applies, limiting how much CAM charges can increase year-over-year
• Audit rights, allowing the tenant to review the landlord’s actual expense documentation supporting the charges billed
• What’s included and excluded from each NNN category — capital improvements, for example, are sometimes improperly passed through as maintenance when they should be a landlord cost

Absolute Net and Ground Leases

Some leases go further than standard triple net, shifting essentially all property-related costs and even structural repair obligations to the tenant — sometimes called “absolute net” or “bondable” leases. These are more commonly seen in single-tenant, long-term leases (such as ground leases) and warrant particularly careful review given the scope of obligations assumed.

Negotiating Within an NNN Structure

Even within a triple net framework, tenants have room to negotiate — capping annual CAM increases, excluding capital expenditures from pass-through charges, securing audit rights, and negotiating insurance-related pass-through protections given current market conditions in Florida specifically.

Evaluating a triple net lease and want to understand your true occupancy cost? Brent A. Levison, P.A. has over 25 years of experience negotiating NNN leases for commercial tenants. Contact the firm today for a consultation.

The information in this article is provided for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please consult a qualified attorney.

The post Triple Net (NNN) Leases Explained first appeared on Brent Levison.

Structural vs. Non-Structural: The Common Starting Point

Many commercial leases divide maintenance responsibility along a structural/non-structural line:

• Landlord typically responsible for: roof, foundation, structural walls, and major building systems (though this varies significantly by lease type)
• Tenant typically responsible for: interior finishes, fixtures, and day-to-day operational maintenance within the leased premises

This division isn’t universal, however, and varies significantly depending on lease type — a triple net lease shifts substantially more maintenance responsibility to the tenant than a full-service gross lease does.

HVAC: One of the Most Commonly Disputed Items

HVAC maintenance and replacement responsibility is one of the most frequently contested areas in commercial leases, given the significant cost of major HVAC repairs or replacement. Leases should specify clearly:

• Who is responsible for routine maintenance (often the tenant, even when the landlord retains responsibility for major repairs or replacement)
• The threshold at which responsibility shifts from tenant-funded repair to landlord-funded replacement
• Whether HVAC costs are passed through as part of CAM charges even when the landlord handles the actual maintenance

Common Area Maintenance

For properties with shared common areas — parking lots, lobbies, landscaping, shared restrooms — the landlord typically handles maintenance directly, with costs passed through to tenants via CAM charges. Tenants should review what specific services are covered and confirm the actual condition of common areas matches what CAM charges suggest is being maintained.

What Happens When Maintenance Obligations Are Breached

Leases should specify a tenant’s remedies if a landlord fails to perform required maintenance — commonly, a right to notify the landlord and, if uncured within a defined period, a right to perform the repair themselves and deduct the cost from rent (a “self-help” remedy), though this right is often limited or requires specific procedural steps to invoke properly.

Negotiating Clearer Maintenance Allocation

Vague maintenance language — leases that simply state the landlord will maintain the property “in good condition” without defining specific systems or thresholds — invites disputes. Tenants and landlords benefit from specifically enumerating which party handles which systems, rather than relying on general language that can be interpreted differently by each party when a dispute actually arises.

Negotiating maintenance responsibility in a commercial lease, or dealing with an unresolved repair issue? Brent A. Levison, P.A. helps tenants and landlords clarify and enforce maintenance obligations. Contact the firm today for a consultation.

The information in this article is provided for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please consult a qualified attorney.

The post Landlord Responsibilities and Maintenance Obligations in Commercial Leases first appeared on Brent Levison.

What a Force Majeure Clause Actually Does

A force majeure clause excuses a party’s performance under a lease — typically delayed rent payment, or in some cases, entire obligations — when an event outside either party’s control makes performance impossible or impracticable. Whether a hurricane qualifies, and what relief it actually provides, depends entirely on the specific language in the lease rather than being automatic.

Force Majeure Doesn’t Always Mean Rent Is Excused

A common misconception among tenants: force majeure automatically means rent doesn’t have to be paid during a hurricane-related closure. In reality, many force majeure clauses only excuse non-monetary obligations (like an operating covenant requiring the business to stay open during certain hours) while rent remains due regardless — unless the lease specifically addresses rent abatement for casualty events separately.

Casualty Clauses: The Provision That Actually Addresses Rent

Separate from force majeure, most commercial leases include a casualty (or “damage/destruction”) clause that specifically addresses what happens to rent obligations if the premises are damaged and unusable. This is typically the more directly relevant provision for hurricane-related property damage, and tenants should review it independently from force majeure language.

Key elements of a strong casualty clause:

• Rent abatement during any period the space is unusable due to covered damage
• Landlord’s obligation and timeline to repair, with a defined outside date
• Tenant’s right to terminate if repairs aren’t completed within a reasonable period
• Clarity on which party’s insurance responds to different categories of damage

Business Interruption Insurance: A Tenant’s Own Protection

Rent abatement under a lease only addresses the tenant’s obligation to the landlord — it does nothing to replace the tenant’s own lost revenue during a closure. Business interruption insurance, carried by the tenant, is what actually covers lost income and continuing expenses during a covered closure period. Tenants should confirm their own coverage independently, rather than assuming lease protections address this risk.

Coordinating Lease Language With Actual Insurance Coverage

Ideally, a tenant’s force majeure and casualty clause protections should be reviewed alongside their actual insurance coverage — including any personal guaranty exposure that could remain even during a period of reduced or abated rent, if the lease doesn’t clearly address guaranty obligations during a casualty event.

Reviewing These Provisions Before Hurricane Season, Not During It

The worst time to discover a lease’s force majeure and casualty provisions are inadequate is in the days after a storm, when a tenant is already dealing with property damage and lost revenue. Reviewing — and if necessary, renegotiating or clarifying — these provisions before signing, or during a renewal, is far more effective than trying to interpret ambiguous language under pressure after a storm has already hit.

Preparing your business lease for hurricane season, or dealing with storm-related lease issues now? Brent A. Levison, P.A. has over 25 years of experience helping Florida commercial tenants navigate force majeure and casualty provisions. Contact the firm today for a consultation.

The information in this article is provided for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please consult a qualified attorney.

The post Hurricane Season and Commercial Leases: Force Majeure and Business Interruption Clauses first appeared on Brent Levison.

Background: What the Commercial Rent Tax Covered

Florida’s commercial rental sales tax applied to rent paid for commercial real property — office, retail, warehouse, and other business space — separate from the transient rental tax applied to short-term residential and hotel stays. The rate had been reduced incrementally in recent years as part of a broader legislative phase-out effort.

What Changes With the Phase-Out

As the phase-out takes effect, tenants should confirm the current applicable rate (or confirm the tax has been eliminated entirely, depending on the specific timing) directly with a tax professional or through the Florida Department of Revenue, since the exact effective date and any transitional rules matter for accurate budgeting.

How This Affects Lease Negotiations

Rent calculations and quoted rates. Landlords and tenants should confirm whether a quoted rental rate is being presented as tax-inclusive or tax-exclusive, and adjust expectations as the tax phases out — a source of potential confusion during the transition period specifically.

CAM and additional rent. Depending on how a lease defines “rent” for tax purposes, the phase-out may affect not just base rent but also CAM charges and other additional rent categories, depending on how those are structured and whether they were historically subject to the tax.

Existing leases. Tenants and landlords with leases signed before the phase-out should review how their lease addresses sales tax — some leases reference the tax as a pass-through cost calculated at “the then-applicable rate,” which should adjust automatically as the rate changes; others may reference a fixed rate that doesn’t automatically update.

Why This Isn’t Purely a Tax Question

While the rent tax itself is a tax matter best confirmed with a CPA, how it’s addressed within lease language — particularly in multi-year leases signed during the transition period — is a legal drafting question. Ambiguous language about which party bears responsibility for tax changes, or how “rent” is defined for tax purposes, can create disputes as rates shift.

What to Confirm Before Signing a New Lease in 2026

• The current applicable commercial rent tax rate (or confirmation of elimination) at time of signing
• Whether the lease explicitly addresses future rate changes, rather than assuming automatic adjustment
• Whether CAM and other additional rent categories are treated consistently with base rent for tax purposes

Negotiating a new commercial lease during Florida’s tax transition period? Brent A. Levison, P.A. helps tenants and landlords navigate lease terms affected by Florida’s evolving tax landscape. Contact the firm today for a consultation.

The information in this article is provided for general informational purposes only and does not constitute legal or tax advice. For advice specific to your situation, please consult a qualified attorney and tax professional.

The post What Florida’s 2026 Commercial Rent Tax Phase-Out Means for New Leases first appeared on Brent Levison.

Why Florida Insurance Costs Have Risen

A combination of factors — increased hurricane exposure, reinsurance market pressures, litigation costs, and insurer withdrawals from the Florida market — has driven commercial property insurance premiums up significantly across the state, with South Florida coastal properties often seeing the sharpest increases.

How This Shows Up in Commercial Leases

CAM charge increases. For tenants paying CAM charges that include a pro-rata share of the landlord’s property insurance, rising premiums translate directly into higher pass-through costs — sometimes substantially higher year-over-year, catching tenants off guard if their CAM cap doesn’t account for insurance volatility.

Insurance requirements on tenants. Landlords are increasingly requiring higher tenant liability insurance limits, and in some cases requiring tenants to name the landlord and lender as additional insureds with specific, detailed coverage requirements that go beyond what was standard even a few years ago.

Negotiating insurance caps or carve-outs. Some tenants are now negotiating for insurance costs to be excluded from, or capped separately within, an overall CAM cap — treating insurance as a distinct, more volatile category rather than lumping it in with more predictable operating expenses like landscaping or common-area maintenance.

What Tenants Should Ask Before Signing

• Whether insurance costs are included within a CAM cap, or pass through uncapped
• The landlord’s recent insurance cost history, to understand the trend rather than just the current premium
• Whether the lease allows the landlord to pass through increased deductibles (many Florida property policies now carry substantial hurricane deductibles) in addition to premium increases

Impact on New Development and Buildout Decisions

Rising insurance costs are also affecting decisions around tenant improvement allowances and buildout standards, as landlords weigh insurance implications of certain construction types and tenant uses more heavily than in the past.

Why This Is a Negotiation Point, Not Just a Market Fact

Because insurance cost increases are often unpredictable and can be substantial, tenants have a real interest in negotiating specific protections — caps, exclusions, or advance notice requirements — rather than accepting open-ended pass-through language. This is a meaningfully different negotiating environment than existed even five years ago, and lease language that was standard then may no longer adequately protect a tenant now.

Negotiating a commercial lease in today’s Florida insurance environment? Brent A. Levison, P.A. helps tenants and landlords structure lease terms that account for current market realities. Contact the firm today for a consultation.

The information in this article is provided for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please consult a qualified attorney.

The post How Rising Commercial Insurance Costs Are Reshaping Lease Negotiations in Florida first appeared on Brent Levison.

What Is a Mechanic’s Lien?

A mechanic’s lien (governed by Chapter 713 of the Florida Statutes, the Construction Lien Law) gives contractors, subcontractors, laborers, and material suppliers a legal claim against a property for unpaid work or materials — essentially, security for payment tied directly to the property itself, regardless of who ultimately owes the money.

Why Paying the General Contractor Isn’t Always Enough

This is the aspect of Florida lien law that catches many property owners off guard: if a general contractor is paid in full but fails to pay its subcontractors or suppliers, those unpaid parties can still file a lien directly against the owner’s property. The owner may end up effectively paying twice — once to the general contractor, and again to satisfy a subcontractor’s lien — unless proper precautions were taken.

The Notice of Commencement

Florida law requires property owners to record a Notice of Commencement before starting construction work exceeding a certain value. This document formally establishes the start of the project for lien priority purposes and must be properly posted at the job site. Failing to record it correctly can create complications in managing lien exposure throughout the project.

Protecting Against Unwanted Liens: Lien Releases and Waivers

The primary tool for protecting against subcontractor liens is requiring lien waivers and releases as a condition of each payment — both progress payments and final payment. These come in several forms:

• Conditional waiver — effective only once payment actually clears
• Unconditional waiver — effective immediately upon signing, regardless of whether payment has cleared

Owners should require conditional waivers tied to actual payment clearing, and unconditional waivers only after confirming funds have cleared — never the reverse, which leaves the owner exposed if a payment fails.

The Notice to Owner

Subcontractors and suppliers without a direct contract with the owner (meaning they contracted with the general contractor, not the owner directly) are generally required to serve a “Notice to Owner” within 45 days of first providing labor or materials, in order to preserve their lien rights. This notice gives the owner visibility into who’s actually working on the project — critical information for managing payment and requiring appropriate lien waivers from each party.

Lien Deadlines

Florida law imposes strict deadlines for filing a lien (generally within 90 days of the claimant’s final furnishing of labor or materials) and for enforcing it through a lawsuit (generally within one year of recording the lien, absent specific circumstances that shorten this period). Missing these deadlines can extinguish an otherwise valid lien claim — relevant both to owners managing risk and to contractors protecting their right to payment.

Bonding Off a Lien

If a lien is filed and disputed, Florida law allows a property owner to “transfer” the lien from the real property to a bond — removing the cloud on title while the underlying payment dispute is resolved separately. This is often essential for owners who need to sell, refinance, or otherwise clear title while a lien dispute remains unresolved.

Managing a construction project and want to protect your property from lien exposure? Brent A. Levison, P.A. helps property owners navigate Florida’s construction lien law. Contact the firm today for a consultation.

The information in this article is provided for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please consult a qualified attorney.

The post Mechanic’s Liens in Florida: What Property Owners Should Know first appeared on Brent Levison.

Why This Liability Follows the Property

Under federal environmental law (primarily CERCLA, the Comprehensive Environmental Response, Compensation, and Liability Act), current property owners can be held liable for contamination cleanup regardless of who caused it or when it occurred — a principle that surprises many first-time commercial buyers. This liability exposure is exactly why environmental due diligence is standard practice, not an optional precaution.

Phase I Environmental Site Assessment

A Phase I ESA is a non-invasive review conducted by a qualified environmental professional, involving:

• Historical review of the property’s prior uses (through historical records, aerial photographs, and city directories)
• Review of regulatory databases for known contamination on the property or neighboring properties
• A physical site visit to identify visual signs of potential contamination
• Interviews with current and past owners or occupants, where available

A Phase I ESA typically concludes with a determination of whether “Recognized Environmental Conditions” (RECs) are present — indicators suggesting a release or threat of release of hazardous substances.

Phase II Environmental Site Assessment

If a Phase I ESA identifies RECs, a Phase II ESA may be warranted — this involves actual physical testing (soil borings, groundwater sampling) to determine whether contamination is actually present, and if so, its extent. Phase II assessments are more expensive and time-consuming, but provide the concrete data needed to assess actual risk and potential remediation costs.

The “Innocent Landowner” Defense

Conducting a Phase I ESA before acquiring a property, in accordance with the EPA’s “All Appropriate Inquiries” standard, is what allows a buyer to potentially qualify for the “innocent landowner” defense under CERCLA — protecting a buyer from liability for pre-existing contamination they neither caused nor knew about. Skipping this diligence step, even on a property that appears clean, forfeits this protection entirely.

Common Contamination Sources in Commercial Properties

• Underground storage tanks (former gas stations, older industrial sites)
• Dry cleaning operations (a historically common source of soil and groundwater contamination)
• Auto repair and industrial facilities
• Properties near or on former agricultural land (pesticide residue)
• Properties adjacent to known contaminated sites, even without direct historical use on the subject property

Negotiating Environmental Risk Into the Deal

When environmental concerns are identified, buyers have several options: negotiating a reduced purchase price to account for remediation costs, requiring the seller to remediate before closing, obtaining environmental insurance, or in some cases, walking away from the transaction. Structuring this properly requires environmental findings to be integrated into the broader due diligence and purchase agreement process.

Acquiring commercial property and need environmental due diligence guidance? Brent A. Levison, P.A. helps commercial buyers navigate environmental risk as part of a comprehensive due diligence process. Contact the firm today for a consultation.

The information in this article is provided for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please consult a qualified attorney.

The post Environmental Due Diligence in Commercial Real Estate Transactions first appeared on Brent Levison.

Understanding Zoning Designations

Local zoning ordinances (in Miami-Dade County, governed by the county’s zoning code and applicable municipal codes) designate what uses are permitted on a given property — commercial, industrial, residential, mixed-use, and further subcategories within each. A property’s current zoning may permit the seller’s existing use while prohibiting what the buyer actually intends to do with it.

Permitted Use vs. Conditional Use

• Permitted (by-right) use — allowed under the current zoning designation without any additional approval
• Conditional use — allowed only with a specific approval process, often involving a public hearing and discretionary review by the local zoning board
• Prohibited use — not allowed under the current designation at all, requiring either a variance or a formal rezoning to pursue

Buyers should confirm which category their intended use falls into well before the diligence period expires — discovering post-closing that an intended use requires conditional approval (or isn’t permitted at all) can be a costly mistake.

Legal Nonconforming Use

Sometimes a property’s existing use predates current zoning regulations and would not be permitted if applied for today — but is allowed to continue as a “legal nonconforming use” or “grandfathered” use. These situations carry risk: nonconforming use status can be lost if the use is discontinued for a certain period, or if the property undergoes substantial renovation, potentially forcing the property into compliance with current, more restrictive zoning.

Variances and Rezoning

If a buyer’s intended use isn’t permitted under current zoning, two paths may be available:

• Variance — a discretionary exception to a specific zoning requirement (such as a setback or parking requirement), typically for narrower, more technical issues
• Rezoning — a formal change to the property’s zoning designation, involving public hearings and local government approval, generally a longer and less certain process

Neither is guaranteed, and both typically require time that may not align with a buyer’s closing timeline — making it important to address zoning questions during due diligence, not after closing.

Concurrency and Impact Fees

Some jurisdictions require confirmation that adequate infrastructure (roads, water, sewer capacity) exists to support a proposed development or change in use — called concurrency review — and may impose impact fees tied to the intended use’s demand on public infrastructure. These costs and requirements should be understood before finalizing a purchase price.

Making Zoning Review Part of the Purchase Agreement

Buyers with an intended use that isn’t clearly permitted by-right should consider making the purchase contingent on confirming zoning compliance (or securing necessary approvals) during the due diligence period — building this protection into the purchase agreement itself, rather than discovering a problem after the contingency period has expired and earnest money is at risk.

Buying commercial property with a specific intended use in mind? Brent A. Levison, P.A. helps buyers navigate zoning and land use issues before they become costly surprises. Contact the firm today for a consultation.

The information in this article is provided for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please consult a qualified attorney.

The post Zoning and Land Use Issues for Commercial Property Buyers first appeared on Brent Levison.

The Basic Requirement: Like-Kind Property

Section 1031 allows deferral of capital gains tax when an investment or business property is exchanged for another property of “like kind.” For real estate, this is interpreted broadly — most real property held for investment or business use qualifies as like-kind to other real property held for investment or business use, regardless of specific property type (an office building can be exchanged for retail property, for example).

Strict Timing Rules

1031 exchanges are governed by two critical deadlines, both running from the date the original (relinquished) property closes:

• 45-Day Identification Period — the replacement property (or properties) must be formally identified in writing within 45 calendar days
• 180-Day Exchange Period — the replacement property must actually close within 180 calendar days

These deadlines are strict, with essentially no extensions available (short of specific, rare circumstances like federally declared disasters) — missing either deadline disqualifies the exchange and triggers the deferred tax.

The Role of a Qualified Intermediary

A 1031 exchange requires a Qualified Intermediary (QI) to hold the sale proceeds between the relinquished property’s closing and the replacement property’s purchase. The seller cannot receive or control the proceeds directly at any point — doing so, even briefly, disqualifies the exchange entirely. Selecting a reputable, properly bonded QI, and setting up the exchange agreement before the relinquished property closes, is essential.

Identification Rules for Replacement Property

Investors typically use one of these identification approaches:

• Three-Property Rule — identify up to three potential replacement properties, regardless of value
• 200% Rule — identify any number of properties, as long as their combined value doesn’t exceed 200% of the relinquished property’s sale price
• 95% Rule — identify any number of properties, with no value limit, but the investor must ultimately acquire at least 95% of the total value identified

Boot: What Can Trigger Partial Taxation

“Boot” refers to non-like-kind value received in the exchange — cash taken out, debt relief exceeding what’s replaced on the new property, or personal property included in the deal. Receiving boot doesn’t disqualify the entire exchange, but it does trigger taxable gain to the extent of the boot received. Structuring the exchange to match or exceed both the value and the debt of the relinquished property avoids unintended boot.

Common Mistakes That Derail an Exchange

• Missing the 45-day identification deadline due to inadequate advance planning
• Improperly structuring or delaying engagement of the qualified intermediary
• Taking receipt of proceeds, even briefly, before the QI is properly involved
• Failing to account for debt replacement requirements, inadvertently creating boot

Why Legal Guidance Matters Alongside Tax Advice

While a 1031 exchange is fundamentally a tax strategy, the legal documentation — the exchange agreement, purchase and sale agreements structured to accommodate the exchange, and coordination with the due diligence process on the replacement property — benefits from experienced legal counsel working alongside a CPA or tax advisor familiar with 1031 requirements.

Considering a 1031 exchange for a commercial property sale? Brent A. Levison, P.A. has extensive experience structuring commercial real estate transactions, including 1031 exchanges. Contact the firm today for a consultation.

The information in this article is provided for general informational purposes only and does not constitute legal or tax advice. For advice specific to your situation, please consult a qualified attorney and tax professional.

The post 1031 Exchanges: Deferring Capital Gains on Commercial Property Sales first appeared on Brent Levison.