Commercial Property & Development
Commercial Real Estate is a very broad area and the level of services provided to commercial clients varies depending upon the needs and abilities of commercial clients. Commercial real estate transactions range from a construction loan closing (which can include a title examination and a zoning compliance letter and issuance of a title insurance policy) to every step of the acquisition, development, construction and sale of a commercial, industrial or residential development.
Commercial Purchase and Sale Agreements and Negotiations:
In the acquisition process, clients need representation in the negotiation of purchase and sale agreements. Negotiation issues can include due diligence provisions, zoning and title contingencies, permitting contingencies, financing contingencies, seller financing provisions, environmental contingencies, extension provisions and liquidated damages provisions.
Counsel for a commercial developer is customarily responsible for providing much of the documentation required by construction lenders as part of the construction loan and mortgage process. Counsel is often required to provide a wide variety of documents including enforceability opinions, zoning compliance letters, title insurance policies and certificates of legal existence. Counsel will often review and comment on the proposed loan documents prior to the closing date to be certain that the terms match the requirements of the commitment letter.
Zoning Opinion Letters
While the buyer is examining site conditions and the environmental issues associated with the property, the attorney will examine the record title to the property and the applicable zoning and regulatory provisions.
It has been said that in order to write a reliable zoning compliance letter for property in Massachusetts, the author has to own a set of all-season tires; a reliable zoning compliance letter usually requires a few trips to the local town hall and a search through the boxes stored in the basement to review prior decisions pertaining to the property and the history of the zoning by law applicable to the property. Ultimately, the title examination and the zoning information will be used to provide documentation required by the lender, but the information is invaluable to the permitting process.
Land Use Regulations
The permitting process includes working with the project engineers to identify all of the applicable land use regulations, and adjusting the layout of the project to meet applicable requirements. When full compliance is not practical, local knowledge of the expectations, customs and practices of the local permitting boards is very valuable. Many regional and national developers routinely retain local counsel to provide guidance to the project engineers and represent the project before the local boards.
The permitting process has become significantly more complicated than it was even 10 years ago because of the proliferation of new regulations pertaining to wetlands, endangered species habitat areas, storm water management and environmental protection, plus the increase in the need for special permits for almost any project. A recently approved new car dealership, constructed within a commercial district where dealerships are a permitted by-right use, required six (6) special permits from the Planning Board, one (1) special permit from the Zoning Board, Site Plan Approval from the Planning Board and an Order of Conditions from the Conservation Commission.
Sales and Leasing
Counsel also can participate in the ultimate sale or leasing of the completed premises by preparing and negotiating leases or purchase and sale agreements. In residential developments, the developer’s counsel can participate in all aspects of the sale transactions from assisting the brokers in developing marketing information and draft purchase and sale agreements, to agreement negotiation, addressing title issues raised by buyer’s counsel, deed preparation and preparation of other documents required for closings, and representing the seller at the closing.