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LAW AND PRACTICE
1.1 MAIN MATERIAL SKILLS
Real estate law does not only require purchase and sale
Sale of real estate, closing processes, real estate titles, leasing
and finance, but also experience in a variety of other areas that
are important for many real estate transactions and certain industries. in the
in particular, law firms must have professionals who are familiar with
Environmental laws, land use and zoning, development and
Construction, joint ventures, complex financing structures,
Restructuring and workouts. In addition to good analytical,
Organizational and negotiating skills, effective real estate
Lawyers need to know their client's industry
and corporate goals.
Several recent trends have impacted the skills required
by real estate attorneys, including the popularity of large mixed-use
Projects and the increasing use of tax credits and other complex
Financing structures for large real estate projects. Lots
Classic real estate projects are primarily about the acquisition,
Sale or development of a single building, parcel or contiguous
Land from one owner, with one-stop financing
Lender or Lender Group. Large projects with mixed use, on the other hand, are common
involve developing large areas and sometimes several
non-contiguous real estate blocks from several owners with
different lenders and funding structures.
These projects often have complex land use and justification
Subjects and a variety of ownership that more
Experience in corporate and commercial law. Likewise the
Increased use of tax credits requires experience in tax law and
structuring these loans and project funding in a way
compatible with the business interests of owners, developers
1.2 MAIN TRENDS
Landlords and tenants continue to offer training courses
(e.g. deferred rent) in connection with the COVID-19 pandemic.
Interest rates remain at historic lows related to
the COVID-19 pandemic.
As stationary retail continues to decline,
In favor of e-commerce, traditional retail locations are looking new
Life as a warehouse for online retailers. The COVID-19 pandemic has
also led to some office leases as an office tenant
have built-in remote work functions.
1.3 EFFECTS OF NEW AMENDMENTS TO US TAX LAW
Among other things, the CARES law (Public Law No. 116-136)
enabled small businesses to obtain forgivable SBA loans that
on certain business expenses, including rent,
Mortgage Interest and Utilities. The law also prescribes a temporary one
Eviction ban of tenants secured in certain buildings
through government-secured mortgage loans.
The 2017 Federal Tax Reduction and Employment Act continues to contribute to this
a favorable environment for commercial real estate investments
and property. The law added certain deductions to income
Pass-through entities, currently increased the possibility of spending
certain items and retained 1031 exchanges for real estate. A
Number of Opportunity Zone funds have been created, so it should
Provide short-term capital for projects that meet the requirements
Opportunity Zone Guidelines.
2. SALE AND PURCHASE
2.1 OWNERSHIP STRUCTURES
Any legal person can own land in Mississippi, including
Corporations, partnerships, and limited liability companies (LLCs).
Most of the transactions in recent years, however, have taken advantage
LLCs. An LLC offers the limited liability of a corporation or company
Limited partner in a limited partnership, but allows members
enormous freedom in designing transactions with different tax and
Cash Distribution Scenarios.
The revised Mississippi Limited Liability Company Act provides:
modern and flexible framework, which is generally used by many of the
Provisions of the laws of Delaware LLC, and there were no newer ones
Changes to the common ownership strategy.
2.2 IMPORTANT LEGAL REQUIREMENTS
In terms of "off-homestead" property there is
no special jurisdiction requirements for the transfer of ownership to such
other than the general requirements for a lawful and
proper transfer of ownership (e.g. record keeping). However everyone
Instrument that pretends to convey interest in a homestead,
including a trust deed, must be signed by both spouses (with
2.3 IMPLEMENTATION OF THE LEGAL AND PROPER TRANSFER OF PROPERTY
All property transfers must be made in writing, signed and
given by the transferor. To be constructive
Shipping notification, a certificate must be acknowledged and requested
Entry in the office of the clerk's office of the district in which the
Plot is located. Real estate can be transferred by general guarantee
Certificate, special guarantee certificate or a certificate of withdrawal.
2.4 REAL ESTATE DUE DILIGENCE
Buyers typically hire outside firms for certain aspects of their business
due diligence. Scope and type of due diligence on the part of the buyer
can vary widely, depending on the size of the transaction and the
perceived risk to a particular category of property (e.g.
Industrial land vs. undeveloped agricultural land). A
Environmental / geotechnical engineer would normally be employed
carry out appropriate inspections and tests of the property and a
Civil engineer is hired to handle the survey and access
If the property is vacant land and the buyer plans to develop
the land in a subdivision or other large-scale development that
Civil engineer will be much more involved in due diligence
Phase to ensure the property can be developed this way.
Lawyers are charged with ordering and checking the title
Abstract and the preparation of the title acceptance. Typically
The lawyer who represents the buyer will handle all aspects of the
Due diligence to make sure the land and improvements are in order
suitable condition and that the property is operable and / or
developed as suggested by the buyer.
2.5 TYPICAL REPRESENTATIONS AND WARRANTIES FOR THE PURCHASE AND
There are no clear representations under state or local law. in the
in addition to the usual basic representations (e.g. authority,
Enforceability, title), typical representations and warranties
are required from a seller:
- there are no judgments or legal disputes against the property or
- the seller is not the subject of bankruptcy proceedings is not
Are insolvent and no attachments, or executions
Assignment of assets in favor of the creditors;
- the improvements are in good condition and in working order;
- the property complies with applicable laws;
- the property is properly zoned for its current use;
- there are no liens or new construction on the property for
which the contractor has not paid;
- all permits and licenses have been obtained;
- access is up-to-date and insurable;
- the seller has no knowledge of environmental hazards
present on the property;
- any third party rental lists or reports are true and accurate;
- No leases or pre-emptive rights have been granted except
as communicated to the buyer.
Most purchase and sale contracts see a claim on
Damages and damages if the buyer discovers after closing
that the seller misrepresented some aspect of the property. The term
the representations and warranties are negotiated at the time of purchase
and sales contract and usually lasts between nine months and
two years after the closure. The seller will often negotiate an upper limit
about the amount of liability arising from a breach of assurance that
usually a few percent of the purchase price. It's also common in
Mississippi for the seller to negotiate a deductible that has to be
be reached before a claim for damages can be asserted.
2.6 IMPORTANT LEGAL AREAS FOR FOREIGN INVESTORS
Foreign companies doing business in Mississippi must
register with the Mississippi Secretary of State, though only
Ownership of real estate or personal property is not
In connection with a sale that is not considered an exchange,
is more than $ 100,000 and the property is owned by a
non-resident seller or any legal person who is not qualified to do business
Mississippi, 5% of Seller Realized Amount Must
withheld and paid to the Mississippi Department of Revenue
the payment of income tax on all income from the
The recent changes to the CFIUS regulations have not had much of an impact
in Mississippi because investing in Mississippi businesses through
Foreign nationals, foreign governments, or other foreign entities
2.7 SOIL POLLUTION AND ENVIRONMENTAL CONTAMINATION
A real estate property buyer may be responsible for the soil
Pollution or pollution of a property, even if
did not cause the pollution or contamination. The owner of the
Property is jointly and severally liable for environmental remediation
with other potentially responsible parties (PRP). However under
Federal and state laws require a buyer to:
three "defenses" to be a PRP and must establish and
meet all the requirements to counteract the defenses. maintain
- Defense of innocent landowners;
- bona fide buyer defense; and
- coherent landowner defense.
An innocent landowner is a person who is necessary and
adequate environmental due diligence, but later discovers one
Environmental problem at the site. A real buyer is a person
who buys the property in the clear knowledge that it is environmentally friendly
Conditions are present on the property. A contiguous landowner is a
Person who purchases real estate where environmental conditions exist
on an adjacent property and these terms have moved or will be
move to the purchased property.
All three defenses require "all reasonable investigation"
about the environmental condition of the property
Shut down. The requirements for the establishment of a defense are extensive and
fact-intensive. Because non-compliance is just one thing
Requirement could prevent a buyer from taking advantage of a defense, buyer
should hire a competent environmental advisor when considering a property
suspected environmental problems.
While every transaction is unique, it is common for sellers
to represent that, unless otherwise notified to the buyer,
however, there are no contamination problems with the property in question
such representations are often subject to materiality and / or
Knowledge qualifier. In connection with these representations
Buyers expect sellers to compensate for the pre-close
2.8 PERMITTED USE OF REAL ESTATE IN THE FRAMEWORK OF ZONING AND PLANNING
The zoning ordinances for the applicable jurisdiction will be
include the permissible uses for the property
each zone. On request, the local authorities usually provide
written proof of the applicable zoning.
It is possible to conclude specific development agreements in order to
Support development projects in Mississippi. These types of
Agreements can be found in larger, more complex transactions.
Agreements with government agencies can affect economic
Incentives such as Tax Increment Financing (TIF), infrastructure
Improvements such as access roads and a host of other areas.
The Mississippi Development Authority oversees many nationwide
Economic development programs based on a. could be applicable
Project. There are other types of economic development tools as well
which can be used by cities and counties that may have the
Developers, an agreement with the appropriate
Developers can also enter into environmental contracts
Problems. Programs include the Voluntary Environment Program and
the brownfield program, both of which are an expedited review of
Environmental remediation plans for the site to keep the
potential buyers to quickly clean up the site for redevelopment.
The brownfield program also offers certain financial incentives
in connection with the environmental rehabilitation of a site.
2.9 Condemnation, Expropriation, OR OBLIGATION TO PURCHASE
Sentencing and eminent domain proceedings are possible in the
State of Mississippi. The most common condemnation situation is
in connection with the construction or upgrading of roads. The risk of a
The ingestion by authorities is directly related to the location
the property. Mississippi law provides for a "rapid"
Take “proceedings in which the prosecuting authority takes one
Appraisals and deposits with the courts.
Ownership is then taken, subject to the rights of the owner
challenge the evaluation through legal proceedings. The
Government agency would provide compensation to the owner
Value that is ultimately determined by the court.
2.10 TAXES ON A TRANSACTION
Mississippi has no transfer or registration tax for a
Escrow (except nominal admission fees), but has but
Mineral document tax for the transfer of mineral shares in
the State. The tax is $ 0.03 per acre of net mineral for the
Assignment of a mineral lease and $ 0.08 per net mineral acre for
a mineral certificate. In a typical real estate transaction, the seller is
usually pays for the creation of the certificate and the admission fees,
and all costs related to the delivery of clean property to the buyer (ex.
Approval of an existing trust agreement).
The buyer pays for the title commitment, title policy, etc.
desired title notices and any lender-related fees. The
The parties typically split all fiduciary fees. There is no transfer
Taxes on a stock transfer, and the cost sharing is usually
negotiated between the parties.
2.11 RULES APPLICABLE TO FOREIGN INVESTORS
See 2.6 Important areas of law for foreign
3. REAL ESTATE FINANCING
3.1 FINANCING COMMERCIAL REAL ESTATE ACQUISITIONS
Real estate purchases are usually financed with debt
secured by a stake in the property. Sources of debt
include traditional bank finance, HUD, and others
government-sponsored funding and insurance company funding, however
may also include financing from private equity or hedge fund types
Lender. Bank financing is usually a recourse, but it can be too
no recourse in certain circumstances; Owners and developers prefer it
Receive non-recourse funding when it is available. Large
Transactions can include debt and equity financing or multiple
Debt and Equity Layers.
3.2 TYPICAL SECURITY CREATED BY COMMERCIAL INVESTORS
It is common practice with real estate loans for a deed of credit
Trust to be granted by the property owner
Lender. Declarations of confidence in Mississippi can be excluded
out of court. Mississippi law also allows mortgages that
be foreclosed by the courts so that mortgages are seldom drawn
Mississippi. Assignments of rental contracts and rents are also typical,
whether contained in a trust deed or in a separate document. UCC
Fixture filings are often included in trust agreements, though
a UCC-1 fixture filing can also be recorded in the land registers.
Other security interests in personal property are governed by Article 9
of the uniform commercial code.
3.3 REGULATIONS OR REQUIREMENTS AFFECTING FOREIGN LOAN MANAGERS
Foreign lenders are usually not required to qualify
Do business as long as they have no place of business in. to have
Mississippi and the only business activities carried out by the
Mississippi Lenders Include:
- Creation or acquisition of debt, mortgage and collateral
Interests in real estate or personal property;
- Securing or collecting debts; or
- Enforcement of mortgages or security interests in securing property
the debt, with ownership of the collateral acquired by the lender in
Exercise of legal remedies only in the context of a security document held
for a reasonable period until available.
Value taxes are due and payable on any real or personal
Lender Property and Income, Franchises, Privileges and
other taxes may be incurred as a result of doing business after
Foreclosure or acquisition instead of foreclosure. The income tax
Exemption for interest earned by foreign. received or accrued
Lenders lending Mississippi real estate-backed loans do not
apply to the following:
- a foreign insurance company that is certified by the
Mississippi Insurance Commissioner;
- a foreign lender qualified to do business in Mississippi;
- a foreign lender who has an office or a branch
within Mississippi; or
- Lender who sells real estate in Mississippi and who
Sale and shown according to the installment payment method.
In some cases, a foreign lender can be subject to finances
Corporate Privilege Tax Act as codified in sections of the Mississippi Code
27-21-1 through 27-21-19, which levies a statewide privilege tax on
a lender other than a national or state bank that lends money
secured and safe by a lien on all material personal property
specifically listed items that are in the state. This tax is 0.25%
the total debt, which is secured by the property
3.4 TAXES OR FEES IN CONNECTION WITH GRANTING ENFORCEMENT
The granting or enforcement of a security interest to Real
Mississippi property is subject to low enrollment fees;
there are no mortgage, transfer or document stamp taxes. There
is a documentary stamp duty on the transfer of mineral resources,
but a lien on mineral interest is exempt from this tax.
3.5 LEGAL REQUIREMENTS BEFORE LEGAL ESTABLISHMENT CAN VALID
The company must have the authority and authority to provide security
Interest in his property and it must be the
grant. The consideration must be received by the donor.
3.6 FORMALITIES IN A CREDIT'S RATES
A trust deed is used in virtually all secured property
Transactions. After an error occurs, the procedure goes to
Foreclosure is very simple and requires the publication of a notice
in a newspaper with general circulation in the county where the
the property is for three consecutive weeks (most practitioners
publish four times) and make a sale at the district court.
The Mississippi procedure is quick and inexpensive.
Unless stipulated by contract, there is no obligation to notify
subordinate pledgee of default or sale. The debtor in
Mississippi has the right to "slow down" a loan
the payment of the amount due plus expenses at any time
the completion of the foreclosure auction. A sale is final and there
there is no redemption period after the foreclosure auction
completed. No additional steps are required to give
Priority: Mississippi is a race / publicity state and priority of a lien
is made by filing with the clerk in the appropriate
3.7 SUBORDINATION OF EXISTING LIABILITIES TO NEWLY CREATED LIABILITIES
In general, properly booked secured funding does not lose out on hardship
Priority over post-creation debt, although secured
Building loan can be submitted subordinately
Construction law under certain circumstances. The construction lender
Must be able to demonstrate that the funds from the loan are in the
Construction, and that reasonable care was taken in the payment
the loan proceeds to ensure they were used for construction.
In addition, a lender can contractually agree at any time
take precedence over their lien through subordination agreements or
Agreements between creditors setting out the relative priorities
between the contracting parties.
3.8 ENVIRONMENTAL LIABILITY OF THE CREDIT Lender
There are situations when lenders look for that
Cleaning, removing, cleaning up or getting rid of pollution, but they
are generally exempt from liability if they fulfill two
- The ownership share of the lender must be primarily for that
Purpose of protecting an interest in the property; and
- The lender must not intervene in the management of the loan
Property or facility.
This is generally in line with federal laws that provide a
equivalent exemption from liability.
3.9 EFFECTS OF THE INSOLVENTION OF THE ADHESIVE
When a borrower becomes insolvent and files for bankruptcy, a
The security interest in real estate is subject to the same
Bankruptcy law that would apply in any state. According to a
A borrower cannot grant foreclosure security in real terms
Property because the borrower has all of his
Interest in the property if there is no shortage in the sale. There is no
Repayment period after completion of a foreclosure.
3.10 TAXES ON MEZZANINE LOANS
There are no existing, pending, or proposed rules, regulations or
Requirements that lenders or borrowers pay for any admission or the like
Taxes related to mezzanine loans related to real
4. PLANNING AND ZONING
4.1 LEGAL AND GOVERNMENTAL CONTROLS APPLICABLE TO THE DESIGN,
APPEARANCE AND CONSTRUCTION
Mississippi has passed laws to create a minimum building
Codes and founded the Building Codes Council, the
charged with the adoption of building standards. But the counties
and communities were given the opportunity to stand out from the
uniform system and create their own regulations or not
Issue regulations. Therefore, some counties and municipalities have
will have different building codes.
Most counties and parishes with major relatives
Populations have adopted building codes that are usually consistent
with the International Building Regulations. In addition, design and
Appearance issues are often covered by district or parish zoning
Regulations. The scope of this zone regulation can vary widely
depending on the location of the project.
4.2 REGULATORY AUTHORITIES
Several different government agencies may be responsible for
Regulation of the development and intended use of land
Property. At the state level, the Mississippi Department of
Environmental quality (MDEQ) is in the process of enforcing
Federal and state laws for the environment and health and
Regulations, including those dealing with the approval of water
Use, rainwater runoff and air quality. Development projects
A permit is usually required for more than five acres
Request from MDEQ.
Specific uses of real estate are usually at the
District and community level. Most parishes and counties will
have building codes, zoning codes and similar types of
Rules that must be followed to move forward
with development projects. Some places have subdivision
Regulations requiring subdivision signs when they are real
The property will be divided into new plots. Additional regulatory
Compliance may be required for industrial plants or others
Special developments that are unique
4.3 ACQUIRING PERMISSIONS TO DEVELOP A NEW PROJECT
The procedure for obtaining the necessary permissions for development
a particular property is usually on
at the local and district level, directly with the district or local
Administration unless it involves a change such as a reallocation of the property
required. In the case of a rezoning, the process is notifiable
To be given to adjacent property owners, a public notice
and a public hearing before the local or county government
Since this is a public process, other property owners and
Members of the community as a whole have the option of, or
Objection to the specific request in connection with a
Project. As soon as the governing body has decided
or refuse the requested change, an injured party can appeal
Decision to the courts. Objections have to be filed in a relatively short period of time
(ten days in many cases) so that the developers know quickly
whether other parties intend to sue in court.
4.4 APPEAL AGAINST AUTHORITY DECISIONS
A negative decision related to the development or use of Real
Property of community officials or the county board of directors
can be challenged at the competent local court
Jurisdiction. The deadline for filing the complaint is only ten
Days after the adjournment of the meeting in which the decision was taken
An objection has been lodged, therefore the objection must be processed quickly or
the courts have no jurisdiction over the matter.
The district court acts as the court of appeal in such cases. The
The court reviews the record made before the municipality or the county
Decision-making body. Therefore, it is important to understand that a
Proper recording must be made at the local level for the
Court in order to have a record that is the basis of one
Opinion on the matter.
4.5 AGREEMENTS WITH LOCAL OR GOVERNMENTAL AUTHORITIES
As a rule, it is not necessary to make special agreements
with government agencies in connection with the approval of a development
Project. However, it is perfectly permissible to do so if it does
Aspects of the project – for example an access road
built by the city – that would be the delivery of
certain services or improvements necessary for the viability of the
Project. The use of government agreements would come in very much
large, extensive projects that require additional coordination
with local authorities and agencies.
In many cases, utility companies include agreements with them
Developers in situations where the level of service or capacity of
Service goes beyond what could be a typical development
need. For example, a large industrial plant could be in
Agreements with utility companies to ensure that the right level
the power and amount of supply available for the site.
4.6 ENFORCEMENT OF DEVELOPMENT RESTRICTIONS AND CERTAIN
Restrictions on the development and use of real estate would be
usually enforced by local government officials, and
often in court. When there are administrative remedies
is available, the offended party may be asked to remedy the situation
through an administrative procedure before going to the courts.
5. INVESTMENT VEHICLES
5.1 TYPES OF BUSINESSES AVAILABLE TO INVESTORS TO KEEP REAL
REAL ESTATE ASSETS
See 2.1 Ownership structures.
5.2 MAIN CHARACTERISTICS OF THE CONSTITUTION OF EACH KIND OF
Mississippi generally complies with uniform and federal laws
in relation to corporate governance. The main features
Limitation of liability and flexibility sought by investors
within a unit in order to structure the relevant conditions in such a way that they meet the
concrete transaction. Open partnerships are used, but not
offer limited liability so they are rarely seen.
S-Corporations and LLCs both offer limited liability and
tax pass-through treatment, but S corporations are less flexible
regarding the possibility of planning different internal taxes and
Cash treatments for different participation classes.
C companies offer limited liability, but do not offer them
tax transit treatment, which is often carried out by
Investors in real estate transactions. These differences are not
necessarily unique to Mississippi, but generally used by
federal tax considerations.
5.3 TAX ADVANTAGES AND COSTS
Tax benefits and costs for businesses are generally driven by
state and non-Mississippi tax considerations. LLCs, limited
Partnerships and S-corporations offer tax pass-through treatment,
the corporation itself is therefore not subject to state income tax
Level. The tax attributes are passed on to the members,
Partners or shareholders. C companies are taxed
separated from shareholders in the same way as a
C Corporation is taxed separately for federal income tax
Ein Vorteil einer inländischen Unternehmensbeteiligung in Mississippi
Immobilien ist die Möglichkeit, die Kapitalertragsteuer auf
den Verkauf der Beteiligung am Unternehmen. Daher ist ein Verkauf von
Immobilien, die als Equity-Verkauf umstrukturiert werden können
manchmal eine Methode sein, um staatliche Einkommensteuer zu sparen.
5.4 ANWENDBARE GOVERNANCE-ANFORDERUNGEN
Governance-Anforderungen für verschiedene Unternehmen sind in der Regel die
die gleichen wie in anderen Staaten und sind nicht spezifisch für
Kommanditgesellschaften müssen mindestens einen Komplementär haben,
die entweder eine Einzelperson oder eine Entität sein kann. Die begrenzte
Die Gesellschaft steht unter der Kontrolle des/der Komplementär(s). The
Gesellschaftsvertrag kann die Zustimmung der Kommanditisten erfordern
in bestimmten Situationen, wobei jedoch darauf zu achten ist, dass die
Kommanditisten zu viel Befugnisse, die Gefahr
Kollektivgesellschaft statt der gewünschten Kommanditgesellschaft.
Kollektivgesellschaften stehen unter der Kontrolle aller
Partner, es sei denn, es liegt eine schriftliche Partnerschaftsvereinbarung vor, die
sieht die Governance-Mechanismen der Partnerschaft vor.
Firmen mit beschränkter Haftung
Gesellschaften mit beschränkter Haftung können entweder von einem Manager verwaltet werden oder
von Mitgliedern verwaltet; anspruchsvollere Unternehmen sind im Allgemeinen
Manager-verwaltet. Manager müssen keine Einzelpersonen sein und sind
häufig andere LLCs oder Unternehmen. Die Manager oder Mitglieder können
ernennen Beamte, die der LLC dienen, und können bestimmte Aufgaben zuweisen
an solche Offiziere oder erteilen Offizieren Befugnisse, die
ähnlich den Befugnissen eines leitenden Angestellten in einem Unternehmen. Wenn die LLC
geschäftsführend geführt, dann die Mitglieder in ihrer Eigenschaft als Mitglieder,
kann nicht im Namen der LLC handeln, es sei denn, es gibt etwas Besonderes
In einer von Mitgliedern verwalteten LLC sind die Mitglieder Agenten der LLC
Fehlen einer bestimmten Sprache in der Betriebsvereinbarung des Unternehmens
im Gegenteil. Bei Immobilientransaktionen, Titelversicherer
und andere Parteien werden nach Kopien der Firmenunterlagen suchen
Betriebsvereinbarung sowie Beschlüsse zur eindeutigen Kennzeichnung der
Personen, die bevollmächtigt sind, im Namen des Unternehmens zu handeln.
LLCs sind nicht verpflichtet, eine jährliche Mitgliederversammlung abzuhalten.
Wenn die LLC jedoch 15 Monate lang keine Sitzung abgehalten hat, dann
Mitglieder mit mehr als 20 % der Stimmrechte aller Mitglieder holding
kann eine ordentliche Mitgliederversammlung einberufen, es sei denn, die GmbH's
Gründungsurkunde oder Betriebsvereinbarung vorlegen
Corporate Governance ist wiederum ähnlich wie in anderen Staaten. EIN
Corporation muss mindestens einen leitenden Angestellten haben, aber sie
haben in der Regel einen Präsidenten und einen Sekretär. Ein Vorstand,
die eine oder mehrere natürliche Personen sein können, hat die ultimative Kontrolle
der Angelegenheiten der Gesellschaft. Der Vorstand kann sein
jährlich oder für mehrjährige und gestaffelte Amtszeiten gewählt.
Der Verwaltungsrat ernennt die leitenden Angestellten der Gesellschaft,
die das Tagesgeschäft der Gesellschaft leiten.
Abhängig von der den Beamten der
Kapitalgesellschaft erfordern Immobilientransaktionen in der Regel die
Zustimmung des Vorstandes. Titelversicherer möchten
Überprüfung der Satzung, Satzung und Beschlüsse in
Zusammenhang mit dem Erwerb, der Belastung oder der Veräußerung von Immobilien
Eigentum in Mississippi.
6. GEWERBLICHE VERMIETUNG
6.1 ARRANGEMENTS ZUR NUTZUNG VON IMMOBILIEN FÜR A
Eine Art der Anordnung, die die Nutzung von Immobilien ermöglicht
ohne direkten Kauf handelt es sich um einen Mietvertrag, bei dem es sich um eine Immobilie handelt
Zinsen, die von einem Eigentümer an einen Leasingnehmer als Gegenleistung für regelmäßige
Eine andere Art der Vereinbarung ist eine Lizenz, die von einem
owner to another party and gives such party the right to use the
property under certain conditions. A license does not convey a real
property interest and is usually not for an extended term. Licenses
are normally used for the grantee to complete some type of project
or job, and the license will then terminate. Another type of
arrangement is an easement, which is a right to cross or otherwise
use another's property for a specified purpose.
A common right transferred by easement is the right to access
the grantor's property in order to gain access to the
grantee's property. With an easement, the legal title to the
underlying land remains with the owner of the land.
6.2 TYPES OF COMMERCIAL LEASES
There are different types of commercial leases depending on the
use of the leased premises. There are different considerations,
protections for the landlord, representations and warranties, and
different ways to handle the charges to be paid by the tenant.
Types of commercial leases include build-to-suit, sale-leaseback,
absolute leases, percentage leases, synthetic leases, ground
leases, double net leases, and triple net leases.
6.3 REGULATION OF RENTS OR LEASE TERMS
Rents are not regulated in the state of Mississippi. Mississippi
law requires that leases with a term of more than one year be
written, signed and delivered.
6.4 TYPICAL TERMS OF A LEASE
The customary length of a lease term in Mississippi is five to
ten years, but the lease term largely depends on the property
It is customary in Mississippi for a landlord to be responsible
for any common areas of the building or shopping center, for
structural aspects of the building/demised premises, and for any
utility lines to the boundary of the space. Tenants are responsible
for all maintenance within the demised premises.
The customary frequency of rent payments is monthly.
6.5 RENT VARIATION
Most rents in Mississippi are determined by the terms of the
lease agreement. Most rental rates increase during the term, but
the details of the initial rent and any escalation are subject to
the negotiation of the parties.
6.6 DETERMINATION OF CHANGES IN RENT
Most leases in Mississippi include an escalator, and the rent
increase is based upon either an agreed-upon percentage increase
(eg, 3% to 5%), the increase in fair market value, or an increase
in the Consumer Price Index.
6.7 PAYMENT OF VAT
VAT or other taxes are not payable on rent in Mississippi.
6.8 COSTS PAYABLE BY TENANT AT THE START OF A LEASE
In Mississippi, the tenant usually pays a security deposit to
the landlord at the commencement of the lease. If the lease is
triple net, the tenant will also pay the taxes, insurance and
common area maintenance costs for the property. These costs are
usually paid monthly by the tenant, along with the monthly base
In some leases, tenants are responsible for their own buildout
of the leased premises, whereby a tenant will construct the space
to the agreed upon plans and specifications between the landlord
and tenant. The landlord may only provide a “cold, dark
shell” to the tenant with no concrete floor, no ceiling or
walls and no electricity, and the tenant will be responsible for
providing such to the space. In other leases, a landlord might
provide an improvement allowance to the tenant to pay for the
The amount is usually a negotiated rate per square foot of the
leased premises. In other cases, the landlord may provide the
premises in “move-in condition”, ie, ready for
occupancy. The condition of the premises and responsibility for
completion of the premises typically depends on the type of
property being leased.
6.9 PAYMENT FOR MAINTENANCE AND REPAIR
The maintenance and repair of the common areas (including
landscaping) is paid for by all of the tenants of a center or
building through a common area maintenance expense to be paid to
the landlord monthly. All of the common expenses for these areas
are customarily estimated for a lease year, and the landlord
determines how much each tenant should pay based upon the square
footage of the leased space. The landlord will be responsible for
making sure the common areas are in good working order and
condition, using the funds paid by each tenant through the common
area maintenance expense.
6.10 PAYMENT FOR SERVICES, UTILITIES AND
Most utilities can be separately metered for each tenant, and
such charges will be paid by each tenant directly to the utility
provider. In an office building context, tenants will pay a monthly
charge for these services or the landlord will just charge a gross
rental rate that includes the payment by the landlord to the
utility providers. In Mississippi, this is usually negotiated
between the landlord and the tenant during lease negotiations.
6.11 INSURING REAL ESTATE THAT IS THE SUBJECT OF A LEASE
If the lease is triple net, insurance is paid for by the tenant.
Most landlords make sure the insurance payments are made, and will
therefore collect an insurance expense from the tenant, on either a
monthly or annual basis, and will pay the insurance premium
directly to the insurance broker.
Depending on the policy, most events causing damage will be
covered by a standard property insurance policy.
6.12 RESTRICTIONS ON THE USE OF REAL ESTATE
Landlords often impose restrictions on a tenant's use of
the demised premises. There are regulations and laws that impose
restrictions on how real property can be used (ie, environmental
regulations and zoning restrictions). These regulations are
specific to each city and county, and depend on the master planning
for such. Cities and counties can also set up development districts
that have other restrictions on the use, density, parking and the
specific look and feel of the area (eg, architectural review).
6.13 TENANT'S ABILITY TO ALTER OR IMPROVE REAL
Depending on the lease, a tenant is usually allowed to alter or
improve the real estate. A landlord usually specifies what work can
be performed to the demised premises, and can cap the work at a
certain dollar threshold. The alteration provision of a lease is
usually heavily negotiated between the landlord and the tenant,
depending on the use of the demised premises.
6.14 SPECIFIC REGULATIONS
There is a specific residential landlord tenant act in the state
of Mississippi. Residential leases have to comply with the statute,
which protects residential tenants from certain actions of a
6.15 EFFECT OF TENANT'S INSOLVENCY
Most leases in the state of Mississippi will include a
“termination-on-bankruptcy” clause. However, these
provisions are rarely enforceable as federal bankruptcy law will
govern. Any interest of a debtor will become property of the
bankruptcy estate and the debtor will not lose the property or
This being said, the bankruptcy of a lessee can terminate a
lease agreement. Section 365 of the Bankruptcy Code states that a
debtor may assume or reject an unexpired lease; assumption of the
lease is a decision to retain or continue the lease by the
bankruptcy estate, whereas a rejection is a decision to terminate.
A debtor may not assume the lease unless it can cure defaults and
provide adequate assurance of future performance of the lease.
6.16 FORMS OF SECURITY TO PROTECT AGAINST TENANT'S
FAILURE TO MEET OBLIGATIONS
A tenant can be asked to provide a security deposit of several
months of rent payments, which can be liquidated in the event of
default. A tenant may also be required to provide an irrevocable
letter of credit from a financial institution, which the landlord
can draw upon to satisfy outstanding rental obligations if the
tenant defaults. Landlords typically also take a security interest
in the tenant's personal property located at the leased
premises and obtain one or more guarantees from the tenant's
principals or affiliate entities.
6.17 RIGHT TO OCCUPY AFTER TERMINATION OR EXPIRATION OF
In Mississippi, a tenant does not have the right to holdover and
occupy the leased premises after the expiration or termination of a
commercial lease. However, most commercial leases will contain a
holdover provision that converts the tenancy to a tenancy at
sufferance (at will) upon expiration with an increased rental
amount. Otherwise, a landlord has a statutory action for damages
equal to double rent during the period of the holdover. If the
landlord accepts normal monthly rent from a holdover tenant,
however, a month-to-month tenancy is created.
Self-help eviction is allowed only when the lease agreement
expressly gives the landlord such right and even then, only when
such eviction can be accomplished peaceably. Otherwise, eviction of
a commercial tenant requires landlords to remove the tenant by the
process described in Mississippi Code Section 11-25-1, et seq
(unlawful entry and detainer) or Mississippi Code Section 89-7-1,
et seq (landlord-tenant), each of which requires notice and a
hearing. Eviction of a residential tenant is governed by the
Residential Landlord and Tenant Act (Mississippi Code Section
89-8-1 et seq).
Unlawful Entry and Detainer Action
An unlawful entry and detainer action is a summary proceeding
that must be brought within one year after the landlord has been
denied its right of possession. The statute requires filing a
complaint and issuance of a warrant and allows for witness
subpoenas and the taking of depositions.
An eviction action under the landlord-tenant statute requires
the landlord to, by sworn affidavit that, among other things,
describes the facts supporting eviction and confirms that proper
notice was given. Upon receipt of that affidavit, the court will
issue a summons for the tenant to show why eviction is improper,
and a hearing must be held between three to five days after the
summons date (adjournments not to exceed 45 days after the date the
eviction action was filed). If the tenant fails to demonstrate
sufficient cause to remain on the premises, the tenant will be
removed from the premises and possession delivered to the
6.18 RIGHT TO TERMINATE LEASE
An event of default that could result in termination of the
lease is governed by the terms of the lease. Events of default are
typically breach of any material provision in the lease, including
nonpayment of rent. Upon an event of default, a lease will often
require the non-defaulting party to notify the defaulting party and
allow a reasonable cure period. Failure to pay taxes, material
changes to, or termination of, insurance and unauthorized or
illegal uses of the premises will ordinarily provide a right of
It is also common to have anti-assignment provisions that cause
termination of the lease. Leases typically also specify rights to
termination upon certain casualty or condemnation events.
6.19 FORCED EVICTION
A landlord may evict a commercial tenant through one of the
processes cited in 6.17 Right to Occupy After
Termination or Expiration of Lease (including
self-help if allowed under the lease) upon the occurrence of any
event calling for eviction in a lease.
6.20 TERMINATION BY THIRD PARTY
A lease can be terminated by a government or municipal authority
in a condemnation or eminent domain proceeding. The process for
determining the allocation of the condemnation proceeds between a
landlord and tenant is negotiated in the lease.
See 2.9 Condemnation, Expropriation or Compulsory
7.1 COMMON STRUCTURES USED TO PRICE CONSTRUCTION PROJECTS
Commonly used pricing structures for construction include
guaranteed maximum price (GMP), cost plus and fixed price
7.2 ASSIGNING RESPONSIBILITY FOR THE DESIGN AND CONSTRUCTION OF
Design and construction functions are typically divided between
architects and contractors. However, any number of different
arrangements for dividing responsibilities is possible.
7.3 MANAGEMENT OF CONSTRUCTION RISK
Construction risk is managed through contractual provisions
between the parties, who are generally free to allocate the
relative risks in any manner and through whatever mechanisms they
deem appropriate. The mechanisms include waivers, indemnification,
retainage, pricing bonuses or penalties, scheduling and performance
bonuses and penalties, and other methods that are generally
available in other states. Generally, the owner cannot require the
contractor to prospectively waive its lien rights.
7.4 MANAGEMENT OF SCHEDULE-RELATED RISK
Schedule-related risks in construction projects can be managed
with contractual provisions, which allocate the risk of delays
between the owner and the contractor. These mechanisms can include
penalties for missing milestones as well as incentive payments for
performance and achieving milestones set forth in the contract. The
contract will typically determine which party is responsible for
delays that are not the fault of either party, such as weather
7.5 ADDITIONAL FORMS OF SECURITY TO GUARANTEE A
In public projects, bonding is usually required to secure
performance of the construction job. Payment and performance bonds
are available in private jobs but are used less frequently because
of cost considerations. Many lenders will require construction
bonds when the lender is providing the construction financing.
Guaranties, letters of credit and other mechanisms for providing
security are available, but are used less frequently.
7.6 LIENS OR ENCUMBRANCES IN THE EVENT OF NON-PAYMENT
Contractors, material suppliers, design professionals and others
have statutory lien rights related to work on a project. A secured
construction loan will generally maintain its priority over
subsequent liens as long as the funds from the construction loan
are actually used for purposes of construction of the project and
the lender uses reasonable diligence in the application of the
proceeds of the construction loan. Once a lien has been filed, the
owner can remove the lien by posting a bond in the amount of 110%
of the amount of the lien.
7.7 REQUIREMENTS BEFORE USE OR INHABITATION
The process of final approval before occupancy depends on the
locality of the project. Typically, the local jurisdiction has
inspection requirements that must be satisfied before the local
authorities will issue a certificate of occupancy.
8.1 SALE OR PURCHASE OF CORPORATE REAL ESTATE
There are no transfer or documentary taxes, so the sale or
purchase of real estate does not itself trigger payment of a tax.
If the seller has a gain on the sale of the property, it may be
liable for income tax on the gain.
8.2 MITIGATION OF TAX LIABILITY
There are no transfer, recordation or stamp taxes. The fees for
recordation of documents in Mississippi are nominal, so mitigation
is not necessary.
8.3 MUNICIPAL TAXES
There are no occupancy taxes or taxes paid on rent in
8.4 INCOME TAX WITHHOLDING FOR FOREIGN INVESTORS
When a non-US person disposes of an interest in US real estate,
the proceeds are subject to 15% withholding under the Foreign
Investment in Real Property Tax Act (FIRPTA). The amount of
withholding can be adjusted by obtaining a withholding certificate
from the Internal Revenue Service.
Pursuant to Section 27-7-308 of the Mississippi Code, when a
non-resident of the state of Mississippi sells Mississippi real
property and associated tangible personal property for a sum in
excess of USD100,000, the seller is required to withhold and pay
over to the Mississippi Department of Revenue 5% of the amount
realized by the seller on the sale. If the amount required to be
paid to the Department of Revenue exceeds the net proceeds payable
to the seller, the seller is required to pay to the Department of
Revenue only the net proceeds otherwise payable to the seller. EIN
corporation registered to do business in the State of Mississippi
is considered a resident of the state.
If the seller determines that the 5% required to be paid will
result in excess payment on any gain required to be recognized from
the sale, they may provide the Department of Revenue an affidavit
signed under penalties of perjury stating the amount of the gain
required to be recognized from the sale, and may then pay the
applicable percentage of the amount of the gain required to be
recognized as stated in the affidavit rather than the 5%. Likewise,
if the seller makes a payment that results in an excess payment,
they may file a claim for a refund of the excess payment with the
Department of Revenue, which includes an affidavit signed by the
seller under penalties of perjury stating the amount of the gain
required to be recognized from the sale, and the department will
refund the difference.
Other than the withholding requirements above, foreign sellers
and Mississippi sellers are taxed in the same manner.
8.5 TAX BENEFITS
Property taxes paid are deductible for federal income tax
purposes. While land is not depreciable, improvements to land are
subject to depreciation, which is deductible on the owner's
federal income tax return. Owners may also take advantage of the
Section 1031 exchange rules, assuming all conditions are
satisfied. Mississippi income tax law does not recognize capital
gain, and all gain on property dispositions is ordinary income. In
addition, Mississippi income tax law does not recognize federal
bonus depreciation or the federal investment tax credit. In order
to qualify for a tax-free exchange, both pieces of property must be
located in Mississippi.
In Mississippi, local governing authorities may grant eligible
businesses a property tax exemption on real and tangible personal
property being used in the state for up to ten years. Certain
eligible businesses making certain investments in the state may be
eligible to pay a fee in lieu of property taxes under a fee in lieu
agreement having a term of up to 30 years, but the fee in lieu on
any particular item of property during the term of such an
agreement is limited to no more than ten years. These fee in lieu
agreements are negotiated between the eligible company and the
local governmental authorities.
Additionally, by locating in or expanding into certain counties
in Mississippi, companies may be eligible for property, income,
franchise, and sales and use tax incentives under the Growth and
Prosperity (GAP) Program.
Finally, there are a number of state-sponsored incentive
programs that are available in connection with real estate
development projects, including:
- sales tax tourism rebate, which provides a tax rebate to
qualified applicants of new tourism-oriented projects within the
- historic tax credits;
- new market tax credits;
- tax increment financing;
- bond financing and other related incentives offered through the
Mississippi Business Finance Corporation;
- use of an urban renewal agency (in cases where the local
jurisdiction has such an agency in place); and
- health care industry zone incentives, which provides tax
incentives to qualified health care-related businesses that locate
or expand in Mississippi and create new jobs for state
8.6 KEY CHANGES IN FEDERAL TAX REFORM
See 1.3 Impact of New US Tax Law
Originally Published by Chambers USA Regional Real Estate
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.