Q: I am a licensed Cal realtor not a broker .My client has a offer through me . me being a dual agent.The property is zoned
zoned commercial with a mixed use building consisting of a salon on ground level with a 1700 sf residence above .Owner is going to carry a 1st trust deed of 2,550,000 for 10 years at 5% intrest only monthly payments of $10,625.00.This will help her avoid capital gains tax for now .purchase price is 3,000,000 with 15 % down .
What is the maximum pre payment penalty allowed by law in California on this type mixed use zone commercial property ?
A: Zoning follows the local rules, and it can vary from city to city. You need to consult with a real estate attorney to give you an estimate about the penalty and if there is any way to get the permit for these types of property use.
Lawyers, want to be a Justia Connect Pro too? Learn more ›
- California
- (916) 704-3009
- View Profile
- Answered
A:
In California, the law does not specify a fixed maximum prepayment penalty for commercial or mixed-use properties. However, lenders typically include a prepayment penalty clause in the loan agreement, which must comply with California law. These penalties are often negotiated between the lender and the borrower.
For mixed-use properties, it is common to see prepayment penalties structured as a percentage of the remaining loan balance or as a set fee. The specific terms, including the duration and amount of the penalty, should be clearly outlined in the trust deed or mortgage agreement.
It's important to review the loan documents carefully and possibly consult with a real estate attorney to ensure the prepayment penalty terms are fair and within legal limits. Always ensure your client's understanding and acceptance of these terms before proceeding.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
