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Right of First Refusal

Right of First Refusal

Right of First Refusal

What is the Right of First Refusal in Real Estate Contracts

The explanation of the right of first refusal (ROFR) can be complicated sometimes, but we will discuss the term further to explain what the right of the first refusal means in the real estate business and how it applies to the holders of the right and the real estate owners.

What Is the Right of First Refusal?

The right of first refusal (ROFR) in the real estate is a contract that gives a specific right to a party to purchase a particular property. The right of first refusal must have at least three parties: the owner, the buyer, and the option holder.

The holder of the ROFR may claim the right in the case when an owner of the property sells the property on the market. If the owner sells the property to a third party without offering the holder the opportunity to purchase it first, the holder of the right has the option to sue the owner. After the process, a court can stop or reverse the sale.

One type of ROFR is essentially an option to buy a property for sale at the specific price and under specific terms. The seller and the holder may or may not agree to bind themselves to these terms. The option may end at some specific date in the future and the seller can sell the property under different terms and at a different price when the option stops to be active.

The parties can negotiate the price of the property. If the property has a value of $100,000 in the first year, the holder and the seller can agree that the price can raise each year for 3%. Under these conditions, the option price will be 3% higher, either compounded or not compounded, during each succeeding year.

Depending on the contract, the holder of the ROFR has an opportunity to suggest a sale price without worrying about competition and bidding on the market. The holder can decide to accept or refuse to buy a property. The other case allows the seller to negotiate with other buyers who are interested in the property.

When Is the Right of First Refusal Used?

The right of first refusal is used in a few situations. One of them is the situation when a property has a tenant. When a landlord (owner) decides to sell the property, he must first contact the tenant. The same applies when the tenant is interested in buying a property. An owner must consider the offer from a tenant before negotiating with other parties about the price and conditions.

Another case when the ROFR comes into use is when a family member wants to buy a property. An owner who is a relative to a potential buyer must offer the property to this party first, before offering the property to someone else.

Dealing with a homeowners association or condo board can also be the case when the right of the first refusal comes into force. Sometimes, the governing documents contain the right-of-first-refusal clause that allows the board to vet potential buyers before a seller can accept an offer. In some situations, discount sales can lower the value of the property, which is why communities use the clause to protect the value and reject the offer that is not acceptable.

How the Right of First Refusal Affects Sellers and Buyers?

If you are a seller of a property, you can benefit from the right of first refusal. In case that the market is full of similar properties that are generally low in price, you can sell the property to the holder of the right and get the price that might be higher than the price when selling it to someone else. The contract is drafted before the home hits the market and you might be able to persuade the holder of the right to buy the home at a higher price than the market value.

On the other hand, if you are a buyer, you have many possibilities to profit from the right of first refusal contract. You have the right to be informed by the owner when the owner decides to sell the property. If you are a tenant, you can prepare for the transaction before the period of actual buying of the property comes. You can have a good amount of time to save money for a down payment, or you can choose to improve your credit score. As a holder of the ROFR, you can also discuss the price before it hits the market. This gives you a significant advantage when comparing to other potential buyers.

Both parties have an interest in making a contract that declares the ROFR. The holder can pay the lower price for the property, while the owner can have cash in hand at the right time when the ROFR allows the transaction. The ROFR sets forth a future price. Both parties can have certainty about a future price, time, and other arrangements. If the holder cannot meet the terms of the ROFR in the future, the seller is free to sell the property to someone else in the future.

How Long the Right of First Refusal Is Valid?

Most contracts are made to last one or two years. This period might appear to be short, but there is a reason why both parties decide to make the contract short. The prices on the market can significantly change over a specific period of time, and the value of the property can be completely different in the long run. Both parties usually decide to set the price for a shorter period, just to ensure that the price won’t be much lower or much higher at the end of the specific period. This kind of contract duration protects both the holder of the right and the seller.

Both parties should get lawyers to make clear that each part of the right-of-the-first-refusal contract is clear and understandable. A lawyer can give the right advice to both parties about the price, conditions, and duration of the contract.

Illinois Hemp Lawyer

Illinois Hemp Lawyer

  Our Illinois Hemp Lawyers have written extensively on the first new agricultural commodity of the 21st century - hemp - over on our sister website focusing on our cannabis law practice - www.CannabisIndustryLawyer.com. Illinois Hemp Farmers & Processors...

Thomas Howard

Thomas Howard

Real Estate Lawyer

Whether this is your first land use issue or most recent, our office has helped people and businesses alike.

Thomas Howard was on the ball and got things done. Easy to work with, communicates very well, and I would recommend him anytime.
R. Martindale

How to Use Options and Convertible Notes to Raise Money

How to Use Options and Convertible Notes to Raise Money

If you want to know how to use options to raise money for your business, you've come to the right place. In this article, you'll find out how to use options and convertible notes to raise funds for your business. You have multiple solutions and one of them is trading...

Need A Workout Lawyer

Thomas Howard has completed dozens of loan workouts and helped financial institutions recover the collateral base.  Call (309) 699-4691.

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How to Use Options and Convertible Notes to Raise Money

How to Use Options and Convertible Notes to Raise Money

 How to Use Options and Convertible Notes to Raise Money

If you want to know how to use options to raise money for your business, you’ve come to the right place. In this article, you’ll find out how to use options and convertible notes to raise funds for your business. You have multiple solutions and one of them is trading options which is usually the most lucrative method for raising money.

How to Use Convertible Debt Notes to Make Profit

A convertible note is one form of short-term debt that turns into equity. The valuation of the convertible notes is based on financing that should not be exceeded after a certain period. During the evaluation of convertible notes, you must pay attention to the following criteria:

The discount rate is the representation of the valuation discount that investors receive in one financing round. It compensates the risk of losing invested money.

The valuation cap is a reward for bearing earlier risk. In the case of evaluation caps, you convert notes into equity and convertible note holders get the equity. This applies if the company takes off out of the gate.

Interest rate shows during lending money to a company. Here, the convertible notes will accrue interest. As opposed to being paid back in cash, the interest goes to the principal that is invested, which increases the number of shares.

The maturity date is the time when the company needs to repay the convertible note.

To understand the flexibility of convertible notes, it is important to pay attention to how the notes convert into equity. In most situations, we have the valuation cap and discount rate combined, and we can evaluate convertible notes by these two parameters. At the same time, the convertible note should not have to have a valuation cap. In this case, the discount rate determines the value of the convertible note when it becomes equity. Note holders will get a higher share price and the discount will drive the conversion

How You Can Profit from Call Options

Call options are options that are part of financial contracts that give the buyer the right to buy a stock, bond, or commodity within a specified period. All the mentioned underlying assets tend to increase in price, and that is why a buyer acquires these assets. A call option is different from a put option then the holder sells the asset before the expiration period.

Call options are in use in case of three primary purposes. These are speculation, income generation, and tax management. With all these purposes, the market price of the call option is defined as premium. A call option provides rights that have the premium or the price at the end of the specified period. One of the most profitable solutions when it comes to call options is the solution of covered calls. With a covered call strategy, you can own an underlying stock whose price rises sharply.

How You Can Profit from Writing a Call

Call writing is separated into two forms—covered call and naked call. Covered call writing is good for advanced option traders who want to generate extra income from a portfolio. With covered calls, you can write calls on stocks that are held within the exact portfolio.

Another option is naked call writing, which is for risk-tolerant and sophisticated option traders who want to get the maximum rewards. The risk profile with the naked call is similar to that of a short sale in stock. With naked call writing, your maximum loss can be unlimited, but the possible gain is the biggest when compared to other types of calls.

As you can see, you can trade options or use convertible notes as a way of raising funds for your company. No matter which methods you apply, you must be patient with results. The most profit comes from rates that are increasing over time, and that is why a good method of calculation can give you a significant advantage in the long run. Raising funds for your company is easier when you have legal support from a lawyer. At the same time, the financial support could be a real advantage if you want to collect money faster and easier. Investing money into options and convertible notes could be the best money you can invest.

Illinois Hemp Lawyer

Illinois Hemp Lawyer

  Our Illinois Hemp Lawyers have written extensively on the first new agricultural commodity of the 21st century - hemp - over on our sister website focusing on our cannabis law practice - www.CannabisIndustryLawyer.com. Illinois Hemp Farmers & Processors...

Thomas Howard

Thomas Howard

Real Estate Lawyer

Whether this is your first land use issue or most recent, our office has helped people and businesses alike.

Thomas Howard was on the ball and got things done. Easy to work with, communicates very well, and I would recommend him anytime.
R. Martindale

How to Use Options and Convertible Notes to Raise Money

How to Use Options and Convertible Notes to Raise Money

If you want to know how to use options to raise money for your business, you've come to the right place. In this article, you'll find out how to use options and convertible notes to raise funds for your business. You have multiple solutions and one of them is trading...

Need A Workout Lawyer

Thomas Howard has completed dozens of loan workouts and helped financial institutions recover the collateral base.  Call (309) 699-4691.

REACH US BY EMAIL

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Why Do You Need a Buy Sell Agreement Lawyer

Why Do You Need a Buy Sell Agreement Lawyer

Buy Sell Agreements

Buy Sell Agreement Lawyer

Why Do You Need a Buy Sell Agreement Lawyer?

If you are building a business while you form a partnership, you will need help from a  buy sell agreement lawyer. Signing a buy sell agreement with the partner will protect you from unexpected situations and legal issues. That is why a buy sell agreement lawyer can make an agreement that will protect both parties.

A buy sell agreement claims your rights when it comes to difficult situations. Your partner can fall ill or become unable to operate the business the right way. In that case, a buy sell agreement lowers your financial risks of bankrupt or debt. You can protect yourself by signing an agreement that will keep your business intact.

Comparing a buy sell agreement with a prenuptial agreement is the most accurate comparison. In a prenuptial agreement, you can get out of the marriage under certain conditions. At the same time, you can protect your financial operations. A buy sell agreement offers the same rights, just with one small difference. In a buy sell agreement, you can cover all the financial transactions between the business partners. This makes a buy sell agreement more reliable and more effective in terms of financial stability.

Speaking about two common forms of agreements, we can separate the contracts into:

  • Cross-purchase agreement, and
  • Redemption agreement
A cross-purchase agreement happens when the remaining owners decide to purchase the shares of the business that is for sale. In this matter, it is important to know that the mechanism relies on a life insurance policy.

A redemption agreement is another form of a buy sell agreement. Here, we have a situation when the business entity buys the shares of the business. With a redemption agreement, the contract limits the ability of business owners to sell or transfer their ownership stakes in the business.

Both the cross-purchase agreement and redemption agreement are part of the possible contacts between the business owners, and they can mix the two in their business buy sell agreement. The importance of a buy sell agreement covers most of the financial risks that may occur in the business.

How to Know If a Buy Sell Agreement Is Right for Me

If you plan to start a business with a partner, a buy sell agreement can offer many protective points that can change your business perspective. Many life situations are inevitable and we can rely on this kind of contract when the official regulations are necessary for business operations. Your business partner may go ill or die, and that is when a buy sell agreement comes into effect. Your business capital will be protected and you can continue all the future business operations.

Cross-purchase buy and sell agreements contribute to the rights of the business owners. As a remaining business owner, you can buy the interests of the selling owner. This applies when a selling owner is no longer capable of maintaining their business obligations. Buy and sell agreements are also important in the method of determining the overall business value at the beginning of the business as well as when one of the business owners remains the only owner.

Careful drafting of a buy sell agreement can also eliminate or lower any potential estate taxes that apply at your death. In the situation when you want to pass your ownership interest to one of your family members at your death, avoiding the estate tax is one of the possible outcomes.

Do I Need a Buy Sell Agreement Lawyer?

A buy sell agreement lawyer is necessary if you want to avoid state taxes and protect your business capital and operations. With a buy sell agreement, you will be able to buy shares of the business and prolong your business perspective.

A good buy sell agreement lawyer can help you draft the buy sell agreement that protects both your business partner’s interests and your interests. You will have the right to continue the business operations even in the case of illness or death of your partner. It is possible to stay protected and define a new business strategy with a buy sell agreement. A good buy and sell lawyer can help you craft and improve the right contract that protects you in the case of inevitable circumstances.

Illinois Hemp Lawyer

Illinois Hemp Lawyer

  Our Illinois Hemp Lawyers have written extensively on the first new agricultural commodity of the 21st century - hemp - over on our sister website focusing on our cannabis law practice - www.CannabisIndustryLawyer.com. Illinois Hemp Farmers & Processors...

Thomas Howard

Thomas Howard

Real Estate Lawyer

Whether this is your first land use issue or most recent, our office has helped people and businesses alike.

Thomas Howard was on the ball and got things done. Easy to work with, communicates very well, and I would recommend him anytime.
R. Martindale

How to Use Options and Convertible Notes to Raise Money

How to Use Options and Convertible Notes to Raise Money

If you want to know how to use options to raise money for your business, you've come to the right place. In this article, you'll find out how to use options and convertible notes to raise funds for your business. You have multiple solutions and one of them is trading...

Need A Workout Lawyer

Thomas Howard has completed dozens of loan workouts and helped financial institutions recover the collateral base.  Call (309) 699-4691.

REACH US BY EMAIL

3 + 5 =

RegTech – How it helps companies with compliance

RegTech – How it helps companies with compliance

Regulatory Technology

What is Reg-tech?

RegTech, short for regulatory technology, is a new industry that takes complex regulatory frameworks and creates software from them so businesses can more easily comply with the laws and regulations their industries face.

In this page, we will profile three sectors and provide examples of the new RegTech space, discuss some upcoming conventions, and provide insights on how regtech is helping everyday businesses reduce costs, while increasing compliance with complicated regulatory requirements.

Regtech Landscape

RegTech has the most practical application to industries fraught with regulations at all four levels of government – federal, state, county, and municipal.

Several RegTech companies use novel business models that create governmental relationships to save taxpayers money, and pass the cost onto their business customers that still see cost savings from reduced compliance costs internally.

If you think combining regulations and technology is boring, we will start with the most interesting, and heavily regulated, industry – cannabis.

Call tech Attorney Thomas Howard at (309) 740-4033.

Thomas Howard

Thomas Howard

Peoria Tech Lawyer

Tom Howard started his first techology company in 2014, this website was built by his current one, Stumari – ask him about your company’s technology today.

Peoria Office Address

Examples of RegTech Helping Business

Let’s get to our examples – we will throw in a bonus 4th example, which is the website that I worked on until spinning it off for helping with applying technology to immigration procedures.

Key Takeaways

  • RegTech is the subsector of technology that streamlines compliance for financial, insurance, healthcare, cannabis, or any industry that has to deal with cumbersome regulations.
  • RegTech mostly works for help companies in compliance, reports, or monitoring business practices to ensure regulations are met.
  • The internet and connected devices have spurred development in RegTech and this trend is new, fast growing and likely to continue.

How RegTech Helps Cannabis Compliance

Cannabis laws have not been as complicated as they are now in decades. Each state has its own laws, each city, and increasingly the federal government treats cannabis differently, whether it is hemp, medical, or adult use marijuana.

Long story short, cannabis is the perfect industry for RegTech.  Enter the business helping new cannabis businesses comply with the new laws the various state governments are passing, and the evolving federal landscape: Adherence Compliance.

Stared in 2014, Adherence Complaince begain as Adherence Colorado, but as legalization spread across the US, more businesses needed help complying with the various legislative frameworks.

Today, Adherence Compliance helps not only businesses, but also state and local governments, keep their license holders in compliance.  One of their business models is to get the contracts with governments, but pass the costs for their services to the cannabis-related legitimate businesses, which ends up to be a savings for their complaince.

For more, please visit their website:

How RegTech Helps Healthcare.

The Health Insurance Portability and Accountability Act, better known by its acronym, HIPAA, is a very complex and difficult system designed to help people keep their healthcare information private.

Most companies in the healthcare space fail to comply with it, or have to pay expensive lawyers, or full time staff, to comply.  Failure to comply with HIPAA carries very oppressive penalties that drive the consolidation in the industry due to the risk and the cost of the compliance.

An expensive and cumbersome regulatory framework required for healthcare providers, this is exactly the use case for RegTech.  Some compliance software helps not only what is known as a “Covered Entity” under HIPAA comply, but also what is called their “Business Associates.”

Healthcare is huge business, and gaining access to the sector often means facing HIPAA compliance. As such, what is the startup supposed to do when trying to get their company off the ground in the healthcare sector? Pay tens of thousands for a compliance officer’s salary?  Dump it onto their general counsel?  Or, pay a software company a fraction of that for a license to use their software for a year?

Companies like Compliancy Group can offer something besides the software to help keep companies in compliance with HIPAA’s regulations, it can also help optimize their offerings with the data of its users. A RegTech company has a treasure trove of data about their clients and the problems that they may face in staying compliant.  This provides the basis for new features and updates, but also leverages the best practices that humans on an individual scale simply cannot do.

A general counsel for a healthcare company that doesn’t use a RegTech company to cover their HIPPA complaince faces worse outcomes and higher costs.

RegTech Helping Governments Issue Permits

One of the startups that is trying to fix the problem of issuing licenses and permits is CivicServ.  After I made my first app, I turned toward building software for lawyers that I thought could be coded and I settled on immigration applications. When looking for examples and coders, I found the people beind DevBright, which founded CivicServ.

My Work Visas Solutions, regtech for immigration applications and compliance after the visa holder has been issued, is waiting for my practice to grow to include an immigration lawyer that can fulfill the orders we would get with our SEO services and amazing marketing.  Some of the companies miss that aspect, but their value is clear.

RegTech helps companies comply with the law so they can focus on their business.

The RegTech companies we discussed:

  • Adherence Complaince
  • Compliancy Group
  • CivicServ
  • Work Visas Solutions

If your company has compliance issues, or is facing another technology issue, feel free to call us. 

Our experience in the technology space is beyond what 99% of other business lawyers can provide – plus our SEO is way better so we can help you get more leads.

RegTech Conventions

Unsurprisingly, Germany hosts the mother of all RegTech conventions, but many popular ones are held in the US. While they tend to gravitate toward the FinTech umbrella.  Here’s a list of the industry RegTech Events.

  1. Bearing Point
  2. Comply 2019
  3. know 2019
  4. Global List

Thomas Howard was on the ball and got things done. Easy to work with, communicates very well, and I would recommend him anytime.

R. Martindale

Right of First Refusal

Right of First Refusal

The explanation of the right of first refusal (ROFR) can be complicated sometimes, but we will discuss the term further to explain what the right of the first refusal means in the real estate business and how it applies to the holders of the right and the real estate...

How to Use Options and Convertible Notes to Raise Money

How to Use Options and Convertible Notes to Raise Money

If you want to know how to use options to raise money for your business, you've come to the right place. In this article, you'll find out how to use options and convertible notes to raise funds for your business. You have multiple solutions and one of them is trading...

Need A RegTech Lawyer

Thomas Howard has built software for regulatory compliance before and knows how to help other businesses in the same boat.  Call (309) 740-4033 to talk to him.

REACH US BY EMAIL

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Illinois Hemp Lawyer

Illinois Hemp Lawyer

Illinois Hemp Lawyer

Final Illinois Hemp Rules Released

 

Our Illinois Hemp Lawyers have written extensively on the first new agricultural commodity of the 21st century – hemp – over on our sister website focusing on our cannabis law practice – www.CannabisIndustryLawyer.com.

Illinois hemp Lawyer

Illinois hemp application bot

Illinois Hemp Farmers & Processors Need a Business Lawyer

For answers on the confusing term “agent”  discussed below – you can find the 2nd Notice Filing and Responses to Public Comments – Linked Here. 

Call Cannabis Attorney Thomas Howard at (309) 740-4033.

Want to Get a Hemp License

24/7 we answer the phone – and follow up quickly

Thomas Howard

Thomas Howard

Peoria Hemp Lawyer

Whether you’re growing and processing your first crop of hemp, or your 4th, we can help you in Illinois.

Peoria Office Address

Final Illinois Hemp Rules Released

Approximately one month after the public comment period ended for the first draft of the Illinois Hemp Regulations, the State has released its final version.

Now you can read them yourself

– Hemp Rules Link

We are going to discuss the new rules, which could be the final rules.  Currently, the State calls them the Industrial Hemp Rules With Second Notice Edits.

For more about the procedure of releasing regulations, or rules, after a law is passed – watch the video above.

Illinois Hemp Application Rules

In Illinois, two main hemp applications are covered by the rules – the cultivators’ license, and the processors registration.

The first draft of the rules required any person that either grew (cultivated) or manufactured (processed) hemp needed a license.

However, the first draft of the Rules did not make it clear if each and every employee of the company growing or processing hemp required a separate license.

Think if each and every employee at the local bar required a liquor license – how much more expensive would your drink order become?!

But, unlike your drink order, CBD rich hemp cannot make you intoxicated.  So when reading the newly revised rules.  We caught the attention of a few new terms and what they may mean.

New Changes to Hemp Rules

The newly added terms in the Hemp rules are in red line – and one of them is the new term of art – an “agent.”

An “Agent” is :

“Agent” means any family member, employee, contracted employee, or farmhand of a licensed or registered hemp cultivator or processor.

This is a new term under the rules.  We did not use the red-line version right here, but if you look at the rules link – you will see it in red. This new “Agent” term creates a very burdensome and expensive reading of the rules.  Let’s explain.

Section 1200.20 General Provisions

The general provsions of Illinois Hemp’s regulations provides that:

No person shall cultivate (or process) industrial hemp in the State without first receiving an Industrial Hemp Cultivation License (or registration to process) from the Department.

The next questions is, okay, if each person requires a license or registration to either grow or process hemp in Illinois, then how is “Person” defined under the regulations.

A “Person” defined under Hemp Regulations in Illinois.

You can find the answer in the definitions section – a “Person” is defined as:

“Person” means any individual, partnership, firm, corporation, company, society, association, the State or any department, agency, or subdivision thereof, or any other entity, or the agent thereof.

Does each Employee Require a Hemp License or Registration?

Illinois hemp rules second draft

WTF does that mean?

Because each “person” that handles or grows hemp requires a license or registration to do so in Illinois, and the definition of the term “person” includes the newly defined term “Agent,” then we have a legal conclusion confronting us.

Does each employee – or even family member – count as an agent, which is a person – who all require a license or registration to either grow or process hemp?

Agent should me one license (or registration) per business location.  If you read the comments to why they added the term “agent” it was to help address the issue of licensing all employees and provide clarity – but as you see it does not happen by only reading the rules, you also have to read the commentary on the rules to get the intent of the agency.

How to Start Your Illinois Hemp Application

The vast majority of the information required to complete your business’ Illinois hemp license application is available online. 

We wait for Illinois to produce their official form of application to be able to help our clients make sure their application is correct.

We are also in close contact with the State of Illinois regarding the scope of the licenses and registrations to see if the newly introduced terms may come onto the scene.  For now it appears that Illinois will be starting to take hemp applications very soon.

So call now to start your Hemp application – right now.

 

Want to Get a Hemp License?

We are helping businesses like yours get into the fast growing Illinois Hemp market.

Thomas Howard was on the ball and got things done. Easy to work with, communicates very well, and I would recommend him anytime.

R. Martindale

Right of First Refusal

Right of First Refusal

The explanation of the right of first refusal (ROFR) can be complicated sometimes, but we will discuss the term further to explain what the right of the first refusal means in the real estate business and how it applies to the holders of the right and the real estate...

How to Use Options and Convertible Notes to Raise Money

How to Use Options and Convertible Notes to Raise Money

If you want to know how to use options to raise money for your business, you've come to the right place. In this article, you'll find out how to use options and convertible notes to raise funds for your business. You have multiple solutions and one of them is trading...

Need A Cannabis Lawyer

Thomas Howard has completed dozens of loan workouts and helped financial institutions recover the collateral base.  Call (309) 740-4033

REACH US BY EMAIL

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