Peter W. Thomas, Jr.

Real estate, land use and zoning law is not the negotiation over form documents. Every deal is fragile until it is closed successfully. Even afterwards, it may need to withstand challenges on many fronts. In the event of litigation, you need counsel who can seamlessly transition to the courtroom. TLF's practice includes all aspects of sales and purchases, lending, development of real property, timeshare and fractional interest developments, leases and litigation, golf and resort developments, due diligence, conservation easements, subdivisions, investigations and post-closing business affairs, and all dealings with local zoning boards and citizen's groups and caucuses.

Use Counsel to Assure that Deals will not Unravel - Now or Later . . .

Prospective clients often ask why they should incur the expense of professional fees. Buyers and Sellers are not required by law to use attorneys, but in the resort real estate market where properties routinely are valued in the millions to tens of millions of dollars, it is not the time to proceed on a handshake and good faith. Do you use a seatbelt as safety insurance in the event of an accident? Think of an experienced real estate attorney as your seatbelt...engage counsel before you even start the engine. The consequences of shortcuts can be devastating.

As a Buyer, for example, the consequences of cutting corners during the due diligence process can be severe, ranging from (at one extreme) making it necessary for the buyer to default on the contract and lose the deal (including the earnest money deposit) to (at the other extreme) exposing the buyer to costs, hassles and lawsuits throughout the ownership of the asset. Incautious investors could even end up owning an asset they simply cannot sell except at a substantial discount.

TLF views its role as counsel to clients engaged in commercial or residential transactions as both a counselor and facilitator. You should appreciate the complexities of the transaction, but it is our role to relieve you of addressing the myriad details. A few of the many ways in which TLF can assist you include:

Negotiating the Contract

The purchase/sale contract is the most important document of any real estate transaction. It sets forth the terms of the transaction, contains express and implied representations and warranties by both parties, defines mutual duties and obligations, and spells out legal liabilities in the event of default or breach. Despite the force and effect of the contract, it too often is treated as a trivial form signed by individuals upon only a cursory review and without seeking the professional advice from their attorney.

Typically, the contract price and terms are negotiated through the brokers representing the parties. Most brokers are trustworthy, skilled, and capable of compiling the standard form contracts promulgated by the Colorado Real Estate Commission. As a binding legal document, however, both Buyers and Sellers are well-advised to have an attorney review and approve the contract beforehand.

Additionally, contract forms vary from transaction to transaction, and your attorney plays a vital role in ensuring that the language and certain key elements of every contract are appropriate for the particular transaction. So called "standard" or "form" language in fact varies significantly, with the implications to you and the transaction being potentially devastating.

Due Diligence Review

Due diligence looks for worst-case problems. During this review the buyer must reconcile the "stuff" lawsuits are made of: discrepancies in title documents, regulatory matters, environmental issues, land use concerns, property-specific warranties, service contract agreements, easement and encroachment issues, physical conditions of the property, and so on. Evaluation of a building's structural deficiencies helps ensure that curative costs or credits for undisclosed problems are adequately budgeted. For example, the roof may need to be replaced in the second year of ownership; there may be a crack in the foundation; or certain property elements may not meet the current building codes.

The survey and title documents always require careful review by an experienced attorney. To illustrate the critical attention to minutia, a current client of TLF is engaged in costly litigation over a mere typographical error on a plat map omitting a single letter which potentially affects the validity of a ski-easement accessing a luxury residence in Beaver Creek. Had this client identified the discrepancy at the time of purchase, it could have required seller to remedy the title issue, negotiated a lower price, or had the title insurance company issue an endorsement assuming the risk of any problems with the easement.

Likewise, the consequences of overlooking a stipulation about zoning can be quite severe. TLF uncovered for a client purchasing a commercial property that a zoning ordinance requires more parking spaces per 1,000 square feet of building than the property possesses.

TLF's recent due diligence for another client discovered that the title company's outdated legal description of the property (once depicted on a current survey) excluded two buildings that were part of the property being purchased. Had this error not been uncovered, the buyer would have paid full price for only two buildings rather than the four it thought it was purchasing.

Clearly, the cost of failing to conduct thorough due diligence can be high. A party may end up paying for repairs or remediation that should have been the seller's responsibility, or a Buyer may inherit undisclosed problems that will make it extremely difficult ever to find another buyer for the property. Buyers who close their eyes to this sometimes painstaking part of the process risk inheriting problems that either depress investment returns or inadvertently block an exit strategy.

Even if the final contract contains a broad clause that indemnifies the buyer for all these types of problems, it is very important that the buyer obtain credits for certain of these deficiencies at the time of closing. By the time the buyer becomes aware of a problem and rightfully seeks out the seller to redeem any losses. Even worse, a selling entity may have dissolved and sold all of its assets.

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Whether you are an individual homebuyer or a corporate developer, our office can provide the value-based legal services you need. Mr. Thomas prides himself on his ability to counsel and resolve disputes through sound analysis, negotiation and effective advocacy.

Mr. Thomas' service as Chairman of the Pitkin County Planning & Zoning Commission gives him a particularly unique and valuable insight into all aspects of the planning and development process. He knows the players. He knows the laws. He can get the job done for you.