On the transactional side, Koneck, president of the Minneapolis law firm Fredrikson & Byron, works on the contractual and financing aspects, generally for purchasers. The dispute side runs the gamut, including leases, financing and foreclosures. He usually represents commercial real estate clients, but sometimes he’s with the developers. He also has represented borrowers and lenders in real estate workouts, and debtors and secured parties in real estate bankruptcy cases.
The negative impact of COVID has spread far and wide throughout the industry, but things are starting to pick up, Koneck said. The uncertainty at the beginning was very difficult. People wondered “if the bottom was going to fall out,” he said. Then the economic hits became more segmented, he said. The hospitality business had a really bad time, along with retail business and office rentals — the latter a result of lockdowns.
Other parts of real estate boomed, Koneck said — big box retail, home improvement locations, warehouses, supply chain buildings and online retailers. The supply chain is a “huge problem” and the costs of raw materials is escalating. Commercial real estate will be strong and after a time, office space rental also will be, Koneck said.
But there’s another side to real estate work that is important to Koneck, and that is the Minnesota State Bar Association’s Real Property Law Section’s pro bono initiative. In March 2020, Gov. Tim Walz’s emergency order imposed a moratorium on many residential evictions. It was still in place when this piece was written and both the Senate and the House of Representatives have passed legislation to assist tenants. Federal eviction moratoriums remain in place. Property owners have emphasized their difficulty when the rent that pays the mortgage on the property isn’t paid.
But COVID is not the only reason for evictions, which result from poverty, disability and other disadvantages. “There’s a huge need [for legal services for] the working poor, seniors, the disabled and disadvantaged,” Koneck said.
Some clients own their real estate but can’t make the payments and others are tenants, some of whom are seeing evictions go on despite the moratorium. There is a great need for eviction attorneys and it will grow once the moratorium is lifted and the “floodgates open,” Koneck said.
There are a few options to distressed tenant, depending on circumstances, said Koneck. Sometimes there is a dispute other than rent payment at issue and sometimes the parties can negotiate a payment plan. Sometimes the tenant can negotiate some time to move, he said.
Koneck credits organizations including legal aid and Volunteer Lawyers Network who assist tenants when they can, and adds that the section lawyers fill a well-known gap in pro bono and low bono services. “Our section has incredibly talented lawyers,” he said.
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