Real Property Acquisitions and Development
The typical sale/acquisition is a relatively short term relationship, and normally the parties walk away after closing. But the effects of a deal linger on – the buyer will own the property and has to live with its flaws, while the seller will usually have some on-going exposure to liability for non-disclosure, environmental contamination, etc. A major part of the negotiation of purchase agreements consists of satisfying the parties’ reasonable expectations in these areas, and the focus is often on appropriate due diligence contingencies and indemnities.
Acquisitions often involve a review of surveys and title reports, and especially any documents recorded against title. Title and survey issues often require a painstaking attention to detail, as well as the ability to step back and assess the real-world impact of apparent title flaws.
For instance, we represented a client under contract for a large parcel of raw land who backed away from the deal when close analysis of the survey indicated that the property lacked easement rights over a short stretch of access road. The seller professed unawareness of the problem, and seemed astonished that the buyer would terminate over such a seemingly minor concern, but this was a client that was unwilling to risk being held hostage by some long-absent owner who suddenly appeared after closing.
If property is to be developed in conjunction with other parcels (such as a shopping center), that will normally require a Reciprocal Easement Agreement. This sets forth the necessary access, parking, utility and other easements, and often will establish maintenance and payment obligations. Drafting or reviewing these agreements requires careful forethought and consultation between attorney and client, to minimize the potential for nasty disputes that can damage the economic viability of the center. When you’ve seen a property owner build a fence down the middle of a shopping center parking lot, you realize that the concern is more than just theoretical.
We have also represented clients involved in 1031 delayed exchanges – so-called “Starker” exchanges. We’re not tax lawyers, and a competent accountant or tax adviser is crucial in this area, but we understand the basic structure and ground rules of delayed exchanges, and can handle the real estate side of the deal.