Buying, selling or leasing a piece of real estate entails legal risks under any circumstances. Whether you are selling an investment property, buying a home, or leasing or acquiring facilities for your business, you can run into a host of problems if you aren’t careful.
Of course, it is possible for a real estate deal to go off without a hitch. In the residential sector, the vast majority of deals are fairly straightforward. But, issues can—and do—arise in both residential and commercial transactions, and many buyers, sellers, landlords and tenants will find themselves in need of legal representation.
10 Ways a Real Estate Lawyer Can Help with Your Deal
To minimize their post-closing risk, most parties will benefit from hiring a real estate lawyer during the deal process. Here are 10 ways real estate lawyers help their clients make informed decisions, avoid costly mistakes and derive maximum value from their real estate deals:
1. Performing Due Diligence
In most types of real estate deals, both parties will benefit from conducting due diligence. Buyers and lessees will need to conduct due diligence on the subject property, and sellers and lessors will need to conduct due diligence on their counterparties. Buyers and lessees may benefit from conducting counterparty due diligence as well—for example, to discern whether a seller has gone through a divorce that could potentially impact a buyer’s title, or to discern whether a lessor is at risk of going into bankruptcy or facing a judgment that could lead to early lease termination.
2. Drafting and Reviewing Financing Agreements
A real estate lawyer can review the terms of a buyer’s financing agreement to ensure that its terms are reasonable and do not present any undue risks for the buyer or the seller. Real estate lawyers can assist with drafting seller financing agreements as well. While financing agreements are usually one-sided in favor of the lender, borrowers can—and should—seek to negotiate appropriate protections into their financing agreements when necessary.
3. Drafting and Reviewing Purchase and Sale Agreements
Real estate purchase and sale agreements are complex contracts that must be clear and comprehensive. If an agreement omits key terms, or if any material terms of the agreement are vague, this will significantly increase the risk of disputes down the line. An experienced real estate lawyer will be able to draft and negotiate an agreement that provides adequate protections, thoroughly addresses all pertinent issues, and satisfies the requirements for enforceability under Florida law.
4. Drafting and Reviewing Leases
Commercial leases are also complex contracts that require careful drafting and will often be the subject of heavy negotiations. Lessors and lessees alike need experienced legal representation to ensure that they are adequately protecting their interests in the deal. From parking spaces to CAM charges, virtually all terms in a commercial lease require thoughtful consideration from both parties.
5. Identifying Missing Contract Terms
One of the most important ways a real estate lawyer can help with an acquisition or leasing deal is by identifying any missing contract terms. When attempting to handle deals on their own, parties will typically only look at the terms that are put in front of them. Knowing what material terms are missing requires in-depth legal knowledge that can only be gained from years of practical experience.
6. Negotiating Contract Modifications
From negotiating one-sided indemnification and dispute resolution clauses to negotiating terms previously omitted from a purchase agreement or lease, hiring an experienced real estate lawyer to ensure that you are getting a fair deal is essential. An experienced lawyer will be able to propose modified contract terms based on both industry standards and the governing legal principles in Florida.
7. Conducting Title Searches and Evaluating Title Insurance Policies
When purchasing real estate, conducting a title search and purchasing title insurance work together to mitigate the risk of acquiring something less than clear title and needing to file a quiet title action. A real estate lawyer can assist with obtaining a title search and evaluating title insurance coverage options based on the specific risks a property presents.
8. Handling Issues Related to Contingencies
In a typical real estate deal, contingencies give the buyer the option to terminate or renegotiate based on information that comes to light after the parties execute their purchase and sale agreement. Real estate lawyers assist buyers with exercising contingencies in a timely and appropriate manner, and they also assist sellers with thwarting buyers’ invalid attempts to exercise inapplicable or expired contingencies.
9. Assembling All Closing Documentation
When you get to the closing table, you want to make sure you have all of the documents you need to close the deal. Real estate deals can involve numerous forms of documentation, from agreements and disclosures to insurance policies and title records. An experienced real estate lawyer can ensure that you have all of the documentation you need to close your transaction as scheduled and without any unnecessary hiccups or disruptions.
10. Overseeing and Resolving Issues at Closing
Finally, a real estate lawyer can oversee the closing process to ensure that it goes smoothly; and, if any issues arise at closing, your lawyer can work to resolve these issues favorably while still keeping the deal on track. While issues shouldn’t arise last minute, this is not uncommon, especially if one party gets cold feet or has second thoughts about decisions made earlier in the process. At closing, the final terms of the deal should be in place, and moving forward should be a relatively simple matter of executing all appropriate documentation and handling titling matters as necessary.