Real estate transactions are very complicated. To ensure a smooth transition many people hire a real estate attorney to guide the process. Bruce May of Jennings, Strouss & Salmon has been practicing real estate law in Arizona for over 30 years. Here he answers some of the most common questions about hiring a real estate attorney and the local real estate market.
May, 60, earned his law degree in 1978 from the University Of Oregon School Of Law and his undergraduate from Princeton University. He has extensive experience in representing local, regional and national developers, homebuilders, institutional and individual investors in all phases of the development process. His areas of expertise include acquisition, disposition and development of land for large-scale, master planned projects, retail centers, apartments, offices, industrial developments, resorts and other incomeproducing projects. He also is experienced in land planning, subdivision regulation, liquor licenses, acquisition and development financing, purchase and sale agreements, leases, partnership and management agreements, business asset acquisition, management and disposition, office and retail leases and acquisition and sale of property for locations in various states. May's professional affiliations include The American College of Real Estate Attorneys, American Bar Association and the International Association of Attorneys and Executives in Corporate Real Estate. He also serves as a member of the Phoenix Art Museum, Phoenix Community Alliance, Valley Partnership and the Phoenix Arts District Community Development Corporation.
Does a person really need to hire a real estate attorney when they buy real estate? Why?
May: "Yes. An attorney brings to a transaction expertise, experience and a level of sophistication and, often, creativity that are essential to a well-considered acquisition.
At what point during a project, acquisition or disposition should a real estate attorney get involved?
May: "In the very beginning. Real estate transactions are very complicated. To ensure a smooth transition many people hire a real estate attorney to guide the process. We handle everything from acquisition to disposition and the success of the disposition depends significantly on the manner of acquisition."
Who are your clients?
May: "As a real estate attorney I represent owners, lenders, borrowers, investors, developers, contractors, brokers, property managers, title insurers, escrow agents, municipalities and syndicators."
Do you represent tenants?
May: "Yes, I negotiate leases and enforce tenant rights. In this market I typically do more work for landlords."
Do you work alone on most transactions or as part of a legal team?
May: "One attorney can work a deal, but given the size and nature of the transaction it is often a team effort. I work with a number of attorneys in my office on real estate transactions and I assist in drafting core or ancillary documents."
What services do you provide to a developer buying raw land, for example?
May: "I provide a number of services. A few of them include:
- Identification and formation of entity to acquire title.
- Negotiate a purchase contract that ensures the property is evaluated sufficiently and meets the needs of the client, or enables the client to terminate the contract if it does not.
- Ensure proper due diligence including title and survey review, leases, covenance, conditions and restrictions and other related documents and issues.
- Negotiate the loan documents that will enable the buyer to acquire and develop property on satisfactory terms.
- Create legal infrastructure that will enable the developer to pursue its short and long-term plans.
- Negotiate construction contracts for any improvements that may need to be modified or constructed.
- Negotiate joint venture agreements with third party investors or other developers for coordinated undertaking.
- Enter into development agreements with municipalities or other government entities."
What type of transactions do you handle most often in the Phoenix market?
May: "Over the past year, the real estate market in Phoenix has been up and down. So most of what I've been doing lately is working out obligations that have gone into default and enforcing remedies for existing arrangements. On the transactional side, I've been representing buyers and sellers of improved property such as industrial and office buildings and retail."
When guiding your clients, what skills are critical to your success?
May: "I consider experience, expertise, flexibility and creativity the four elements necessary for client success. You also have to be an expert at closing the deal, which means being thorough, prepared and capable of adapting to the dynamic situations that closings often require."
How do you stay on top of all the new regulations?
May: "I conduct a lot of transactions that require review of current law. I also read a lot. I spend hours reviewing publications that offer insight into developing trends in real estate law, recent cases and current solutions or troubles people encounter in the area I work."
How has the downward shift in the real estate market affected your business?
May: "Business has lightened up since the turn of the real estate market. There is no money in this market and no one is spending money. Arizona has been affected by the collapse of the financial market as much as any state in the United States and that's no exaggeration. To pursue development you have to have money. To dispose of property and make money you have to have someone that wants to buy and assume property ownership. A year or two ago that was not an issue. But in the current climate it's very difficult. My crystal ball isn't any clearer than anyone else's, but I'm optimistic that by 2010 everything will have adjusted itself."
How does a potential client find a real estate attorney?
May: "Word of mouth is a good way, or through publications that rank attorneys in accordance with their real estate expertise. A good source for people to use is The Best Lawyers in America. I've been listed in this publication for 25 years along with a handful of other attorneys in the city."