Real Estate Agreements
Due to the nature of real property itself and the practice of recording various real estate contracts themselves in the public records, real estate agreements of all kinds are potentially treacherous for all parties involved. They may look fairly straightforward to the layman; but they are somewhat "cast in stone" and can be very difficult to unravel or even to amend later on. More often than not, you get one shot at getting it right. This is not the place for a comprehensive discussion of real estate law, but for all practical purposes there are really two types of real estate agreements you'd be involved in that should require the services of a real estate attorney: (i) unusual title documents regarding the property and improvements thereon which are outside the comfort zone of an experienced realtor or escrow officer; and (ii) co-ownership documents that control the relationship between those entities or individuals owning the property. A good real estate contract lawyer can make all the difference in the world by properly "clarifying expectations" of all parties involved in both types of agreements, and getting those in writing as carefully as possible.
As for title documents, your real estate attorney can guide you through the transfer process that is held captive to a great extent by the title insurance companies. I don't mean that necessarily in a negative way; but without their cooperation your deal is simply not going to get done. Your real estate attorney can help you determine whether there are any "holes" or gaps in title to the real estate that you are buying or selling; and if so, what is the most cost effective way to remedy that situation so that everyone is actually transferring what they think they are, and to assure as best you can that the property can be re-conveyed again in the future.
As to the co-ownership agreements, think of them as a sophisticated memorandum of understanding of what everyone thought they were agreeing to when embarking upon this relationship. Whether it be in the form of a partnership agreement to acquire many properties, a limited liability company, or a joint venture agreement to develop a single parcel -- the future relationship between you absolutely must be analyzed and crafted with great care. Back to my term "clarifying expectations" -- your attorney can help you put in place in advance (before emotions get strained later on and no one will agree to anything...) carefully crafted provisions covering:
As for title documents, your real estate attorney can guide you through the transfer process that is held captive to a great extent by the title insurance companies. I don't mean that necessarily in a negative way; but without their cooperation your deal is simply not going to get done. Your real estate attorney can help you determine whether there are any "holes" or gaps in title to the real estate that you are buying or selling; and if so, what is the most cost effective way to remedy that situation so that everyone is actually transferring what they think they are, and to assure as best you can that the property can be re-conveyed again in the future.
As to the co-ownership agreements, think of them as a sophisticated memorandum of understanding of what everyone thought they were agreeing to when embarking upon this relationship. Whether it be in the form of a partnership agreement to acquire many properties, a limited liability company, or a joint venture agreement to develop a single parcel -- the future relationship between you absolutely must be analyzed and crafted with great care. Back to my term "clarifying expectations" -- your attorney can help you put in place in advance (before emotions get strained later on and no one will agree to anything...) carefully crafted provisions covering:
- how will your group value the property under various scenarios;
- who gets to control the property and how;
- when and how and to what extent can the principals be forced to contribute additional capital to the deal;
- what are the available "exit strategies" for one or more of the principals to force a cross-purchase or sale between the owners internally;
- how and when can the majority or some super-majority of the owner group force a sale of the entire property; and
- when can the group borrow against the property, and to what extent?